Innovation

When Not To Innovate

Yes, there may be times we choose not to innovate.

Innovation turned out to be a buzzword for a good reason. Innovation is seen as a panacea for business growth by taking calculated risks and progressing incrementally. Business organizations that want to transform themselves cannot survive and thrive without innovation.

All digital transformation initiatives that I was involved in used innovation as the primary strategy. But I came across exceptional conditions that required a company to choose not innovating purposefully.

I call this exception “an innovative use of exnovation”. The concept refers to a non-innovative approach to specific products and services. This unique approach can be used in modern business. However, the use of exnovation must be undertaken carefully.

Exnovation is an unusual term. It may not sound right when one hears it the first time. This term is not commonly used in media, blogs, or business articles. Therefore, I aim to introduce this concept and its relationship with innovation.

Things manifest in duality in nature. Duality exists in the business world too. Innovation and exnovation can be considered as opposite and contradictory concepts, models, and business practices. However, they are interrelated in a lifecycle.

While we strive for innovation for our ventures, we can also consider exnovation as a strategy that can bring value if applied innovatively, even in modern business settings.

This value proposition may sound paradoxical, but it is applicable. Let me explain.

While the focus of innovation is to extend functionality, usability, and quality of products and services in a rapidly changing marketplace, the exnovation advocates’ premise has been to keep the quality with stringent governance over a long period.

The rationale behind exnovation is to manage brand quality with rigour from a centralized authority. This conventional approach keeps the rest of the team out of the product or service development lifecycle.

The compelling use case for exnovation relates to reputable and traditional business brands. The popular business products using exnovation strategy are elegant cars, aeroplanes, electricity grids, and five-star hotels.

My clients ask me why innovation is more popular than exnovation. They also want to know why we don’t hear or read about exnovation, but the term innovation proliferates throughout the media and is ubiquitous in our lives.

My answer is we are living in a transformative world. We want to transform things into better versions. In the modern world, everything faces rapid change. Disruptions are mined in every corner of business organizations, can explode out of the blue, and destroy the unprepared business organization in no time.

From a technological standpoint, digital transformation has been one of the domains requiring innovation as it has been a critical field where substantial disruptions occur.

For instance, the ways we listen to music, read books, do banking, and do shopping are different from the methods we used to perform these activities a decade ago.

During my innovation workshops, some clients asked me why we should take exnovation with a pinch of salt. Imagine if a business in areas like music, books, banking, and shopping used exnovation as a business strategy a decade ago.

Not surprisingly, their competitiveness in these rapidly transforming markets could have been destroyed. These businesses would lose to the competition. The risk of disruptions is the primary reason we need to take an exnovation strategy with a pinch of salt. It is context-driven and context-specific.

From my experience, an exnovation approach can still be used but only in the short term with a well-defined business strategy, clear objectives, and robust risk mitigation. I name this activity a centralized business experimentation model. Let me clarify.

To better understand the differences between the innovation and exnovation approaches, we need to understand the centralized and distributed (decentralized) experimentation models.

In a centralized experimentation model, only authoritative domain experts are allowed to maintain innovation activities. The governance team can lock the features of products and services once the innovation activity took place.

In distributed experimentation models, extended teams in various ideation labs, collaboration hubs, or Design Thinking workshops can create new features for products and services in rapid iterations. I shared my views on Design Thinking in this article.

The practical use of exnovation must follow a determined, well-governed, stringently controlled product life cycle.

In practical terms, this approach means that we can still govern innovation activities centrally. However, this governance needs to be dynamic and flexible enough to move to the next controlled version of a product or a service in a timely manner.

The most common question in my innovation workshops was how to use exnovation innovatively. I offer a segmentation approach.

Categorizing products and services can be an excellent approach to use exnovation innovatively. One typical example of innovative use of exnovation can be to segregate the products and services into two broad categories: category one and two.

We can apply the innovation strategy to category one. In this category, we can include rapidly changing components that require improvements with creative thoughts.

We can apply exnovation to category two. In category two, we can include stable and durable components with established technology and processes. We can also create subcategories when needed.

The key to determining when a product or service should be put into category one or category two lies in why it is successful in the first place. To change just for change’s sake can lead to risky disasters.

Many business executives pondered about how businesses can take benefits of innovation and exnovation together.

Innovation always comes with risk. To obtain the optimal benefit and mitigate imminent business risks from the innovative use of exnovation, we must integrate these two models and govern them using a robust innovation lifecycle management approach.

Thank you for reading my perspectives.

Reference: A Technical Excellence Framework for Innovative Digital Transformation Leadership — Original version of the story.