Every day along our way to work, we may be crossing any of 100 billboards or banners, catching 1,000 brands with thousands of different products, and bombarded by 2,000 digital ads on all websites. Today, brand competition is accelerating its intensity exponentially and only game changers are at the disruptive spots in a chaotic landscape. Among thousands of name crossing consumers’ minds, the unicorn startups overshadow their counterparts as Spotify in music, Airbnb in hospitality, or Facebook in social media, Tesla in transportation, etc. These unicorns uncountably surprise humanity with their out-of-mind and cutting-edge solutions that totally change the way we think and function our worlds. According to McKinsey Global Institute research in 2019, unicorn companies spend three times more on innovation than median ones. To innovate is the only way to survive.
To any successful organization, innovation can happen to three aspects including product, culture, and brand, which are strongly interconnected to deliver values to consumers. Product innovation creates tangible novelty in functional values while an innovative culture can significantly increase company’s bottom line via boosting productivity. Brand innovation is the combination of both, plus unique emotional benefits. Brand innovation leads to disruptive growth by widening business horizons providing more diverse taxonomy of strategies. Successful brand innovation strategies allow the management board to create disruption beyond their existing business model and core capabilities to remain competitive regardless of new entrants.
#Secret 1: Imperfecto — The secret behind random small wins in product innovation
Mother Nature is known to be responsible for natural selection and reproduction. The massive extinction of dinosaurs 66 million year ago, whether due to asteroid or volcano, was the result of drastic climate change. Having giant and strongest operating systems, historically proven, did not guarantee survival. Darwin’s evolution theory observed patterns of the survival of the “fittest”. What Darwin might not be aware of as he developed the theory was the role of genetics and DNA mutation mechanism in reproduction, caused by random errors in DNA replication or repair, or by chemical or radiation damage. To avoid the curse of being self-destructive and lead the game, players are required to balance between exploration and exploitation, imperfection and greatness. During the early stage of innovation, exploration provides game changers some solace to test as many possibilities as possible, temporarily setting aside future payoffs. As children are cognitively deficient in exploiting to find best-known results, innovators jump restlessly from solutions to solutions with simple rule Win-Stay, Lose-Shift. Their ultimate goal is to acquire new knowledge and identify the attractive than the effective. When time is out, seize any chance to maximize gains, simultaneously, minimize risks. Absence of either step in innovation process results in fatal growth for business. Lack of learnings from imperfect experiments haunt you every day in future with inestimable, and sometimes unbearable, regret of gone opportunities. Meanwhile, to exclude exploitation goals from your projects turns everything into building castle on sand.
Spotify has amazingly established culture of experimentation in its product-driven brand. With 50+ autonomous team working on features, hundreds of A/B tests can be conducted in such limited period time. Their engineers and designers accommodate to ship unpolished and flawful releases, however, able to scale their experiments significantly. Instead of waiting for a complete feature to pass all the tests and prepare to develop a new iteration, Spotify runs erroneous but smart exploration acts and successfully develops what truly matters.
Spotify UI A/B Example
To explore imperfecto of innovation, there are 4 main types of product innovation suitable to specific problem and skill needed to solve them.
Sustaining innovation is long-term investment to create new disruptive products that totally shift current users behaviours, based on existing markets and resources. Normally, this process is expected to endure 36–72 months or even more due to strict technical requirements. However, game changers prove not to be bounded by time and have been able to deploy new technology in extreme short period of time. Airbnb opened a new way of accommodation booking with similar technology of other OTAs (online-travel-agency) but adding new product feature (gig economy with local hosts). Airbnb = OTA + couchsurfing.
Disruptive innovation happens less frequently because of its uncertain expected outcome. It helps mostly in iteration model where continuous improvement is allowed. Product life cycle is quite short, varying 3–12 months, namely packaging change, new additional feature release. The main maxim for this innovation type stays: Move fast and break things. Facebook protects its crown as the largest social media platform of 2,3 billion monthly active users with countless efforts to introduce new product features every month. Setting its innovation lab all over the world, Facebook talents’ rule digital landscape with new creative formats, unique ad type, addictive micro-interactions in user experience and dynamic ad technology. Confetti — Facebook trivia gameshow, is a fruitful outcome of this process, strategically laying outset of interactive-live and on-demand video platform. .
Breakthrough innovation expects to be ready 24–36 months and extends product core features thanks to newly-explored skill sets. Experts from diverse background can be involved along with different initiatives for fast knowledge acquisition such prizes/contest. Basic research provides a stable foundation for the rest to build up. Telsa Motors has signed 5 years of partnership with a leading Canadian university in clean technology and advanced materials to research for lithium-ion battery. This kind of partnership shortens knowledge gaps significantly and shortly. Traditional big corporation heavily focuses on these two latter while forgetting the former.
Next topic: Story 3 (Part 2): Brand innovation — Top winning secrets of game changers
Acknowledgment
We would like to send our deepest gratitude to our friends and partners: BigData Vietnam, Tesse Vietnam, MagikLab, hungkaka.xyz and Mr. Antifragile for sharing their precious insight and reference knowledge for this article.
Authors: Nguyet Nguyen (Azurie) & Hoang Ha (Sylvie)
Reference
- https://www.theatlantic.com/business/archive/2018/10/brand-patrons/568153/?fbclid=IwAR1DYiaAxZt-a6rLe4CF1rhr6bamKVVM21SGxcdqSPyUPR8I_ucHOeRw_ow
- https://www.mckinsey.com/featured-insights/innovation-and-growth/what-every-ceo-needs-to-know-about-superstar-companies
- https://www.mckinsey.com/business-functions/strategy-and-corporate-finance/our-insights/enduring-ideas-the-three-horizons-of-growth
- https://hbr.org/2017/06/the-4-types-of-innovation-and-the-problems-they-solve
- https://hbr.org/2019/02/mckinseys-three-horizons-model-defined-innovation-for-years-heres-why-it-no-longer-applies
- https://www.innovationexcellence.com/blog/2013/07/25/imperfect-innovation/
- https://www.sciencealert.com/scientists-have-confirmed-a-new-dna-structure-inside-living-cells-i-motif-intercalated
- https://www.ntnews.com.au/lifestyle/dna-could-give-clues-to-lifespan/news-story/dd74f07a17efbf670d561bfc7dd98f29
- https://cosmosmagazine.com/biology/four-dna-bases-good-six-better
- https://www.livescience.com/474-controversy-evolution-works.html
- https://www.slideshare.net/alisarrafi3/ab-testing-at-spotify
- https://gotocon.com/dl/goto-berlin-2016/slides/BenDressler_BuildingACultureOfExperimentationAtSpotify.pdf
