Granularity of Innovation

The Bizz Innovation Group helps you manage the various types of innovation in your organization

What is the Granularity of Innovation?

There is not “one size fits all” in innovation. Granularity of innovation, being the extent of differentiation between the different types of innovation, is important because each type of innovations requires its own way of working, performance indicators, type of people and organization/governance. The Bizz Innovation Group has developed the 4x4 innovation matrix to visualize and manage your innovation portfolio.

The most significant characteristic of the matrix is the outside-in focus: it is not your company that is placed in the center, but the market and the customer. The key differentiator is the impact of your innovation on the customer, i.e. has he/she to change his/her behavior. It is not about whether something is new to your company but whether it is new to the market.

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On the vertical axis the different life-stages of the market have been placed, differentiating between emerging, growing, mature and declining markets. On the horizontal axis, the extent of the disruption for the customer is represented as being a function of four distinct possibilities:

  1. Improvement of a product or service in an existing category
  2. Addition of a new product or service to an existing category;
  3. Introduction of a new, emerging category, where the category itself is new but the end-user can still link it to other existing categories of products or services;
  4. Introduction of an entirely new category of products or services.

The essential distinction made in the 4x4 innovation matrix is between the right side and the left side: on the left, we see traditional product creation, on the right there is the creation of new business.
The left hand side is predictable, meaning that it is possible to extrapolate from historic data; markets, market shares, players, and products are known; customers knows what they want, and opportunities may be identified by market research and competitor analysis. Furthermore, means can be acquired and a detailed plan can be developed and implemented. Progress will be measured by monitoring the deviations from the plan. It is about managing risk.
The right side of the matrix is quite a different story. Here markets are undefined; this is the domain where the customer does not yet know what he does not know. The information that is available is both overwhelming and contradictory. What matters here is to transform possibilities into opportunities, which is a dynamic, interactive and barely predictable process. It is about dealing with uncertainty in a proactive and flexible way.

The life-cycle of innovation on the diagonal of the 4x4 innovation matrix largely corresponds to the human life-cycle. The majority of the activities consist of adults: existing products and services that provide for today’s income. There are also elderly people: old and trusted products and services in declining markets that should be taken out of your portfolio to free up money for investments in new strategic directions (outsourcing/partnering). You have some babies – the disruptive long-term innovation projects within Research. And you have teenagers: innovation projects that already have progressed beyond the drawing-board stage and have started their first products and service in the market. “Most companies cherish babies and adults but find it difficult to raise teenagers and say goodbye to their elderly”.

As Bizz Innovation Group we can support you in visualize your innovation portfolio and assist you in how to deal will the different family members and how to create a balanced and harmonious family life.