Innovate: what choices do you have as a company?

You can decide to what extent you innovate.

• Do you make small adjustments to what you already have?
• Or do you want to do totally new things?

And in addition, there are several options for when to initiate that innovation.

Gijs van Wulfen is a professional speaker and well-known author in the field of innovation. This year, his book "The Innovation Maze" was voted the best management book of the year. In this book, he mentions two important moments when a lot of innovation takes place.

1. When a product, brand or organization is still in the growth phase: the Growth phase.
2. When a product, brand or organization is shrinking again: the Decline phase.

At that first moment, that growth phase, companies reason from the thought, "I want to innovate." At the Decline phase, you reason from: "I need to innovate." There is something to be said for both routes; both moments are widely used to innovate as a company.

Innovating in the shrinkage phase

At the Decline stage, the pressure is on. If your idea to combat the contraction of your business fails, you have to come up with something new very quickly to turn the tide. So there are more risks associated with this need to innovate approach. What you often see is that innovation in this phase leads to incremental innovation. Small adjustments to current products and services are chosen. In most cases, companies prefer to play it safe and thus do not go for a big, breakthrough innovation that is very different here.

An example of that incremental innovation, you see for example in the sugary soft drink market. Coca Cola realizes that there is an increasing need for a healthier alternative to sugar, with Coca Cola Zero they are introducing a variant of an existing product. This is only just enough to slow shrinkage. But that approach is not always enough to guarantee your organization's right to exist.

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Innovating in the growth phase

Many companies therefore prefer to innovate in the growth phase. That's the trickiest variety, though. Because as you are growing nicely, you are busy with lots of other things. You run into growing pains. A lot is happening and you have to keep adjusting and honing your business. But it's also a safe route. Because you can grow "on top of" every time.

Suppose you have a product and it's growing. Meanwhile, you launch a new product, which will also achieve that growth. In this way, you create growth upon growth (exponential growth). Several organizations realize that it is difficult to innovate in the Growth phase. Therefore, they consciously choose to have this growth come from a business unit, a branch within the company, which they separate from the rest.

Google, for example, has such a department, and so does Facebook. And large, successful companies like Unilever and P&G also have such separate departments that pick it up. This is not for nothing, of course. They have realized that it is difficult to grow within the organization. So they set up a team that gets all the space and freedom to experiment and do new things. This way you make sure that you are not hindered in your innovation by the rest of your organization.

The smart thermostat Toon is a great "want to innovate" example. Energy supplier Eneco saw that the energy industry is changing and therefore embarked on a new path with Toon. For this, Eneco worked with technology company Quby. So opportunities to innovate can sometimes be found outside your own product portfolio.

Companies that structurally adopt this approach to innovation in the growth phase are more successful. It delivers them more. To grow at this stage, you also have to look further ahead. You've just invented something new and already in the growth phase of that product you have to come up with something new again. If you want to see that far ahead, you need a good understanding of the future.

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