Organizations can use the innovation impact matrix to help them prioritize their innovation efforts and allocate resources towards the most promising ideas. They can also use it to identify areas where they may need further innovation, and to develop strategies to address these gaps.
Even the best companies may sometimes pour millions of dollars into development of innovative technologies and ideas which don’t have the expected high impact. Despite being a highly anticipated and hyped product, Google Glass failed to gain widespread adoption and was discontinued in 2015. Google Wave was an innovative communication and collaboration platform, but it failed to gain widespread adoption and was discontinued in 2010. Amazon’s first foray into smartphone hardware was met with lukewarm reviews and lackluster sales, leading to its discontinuation in 2015. The Segway personal transporter of Dean Kamen was billed as a revolution in personal mobility but failed to gain widespread acceptance due to its high cost and limited functionality. Despite being heavily marketed, 3D television failed to gain widespread adoption due to the need for special glasses and limited content.
In today’s fast-paced and ever-changing business environment, companies are constantly seeking new and innovative ways to stay ahead of the competition. Whether it’s developing new products or services, or finding more efficient and effective ways of operating, companies must be proactive in their approach to growth and success. However, it’s not enough to simply come up with a new idea and hope for the best. In order to maximize the effect of new innovations, companies must carefully assess the potential impact these developments will have on their business, their customers, and their industry as a whole. In this blog post, I’d like to take a brief look at a visualization tool that can help to do that.
The Innovation Impact Matrix Explained
An innovation impact matrix is a tool used to classify and organize different types of innovation according to their level of novelty and impact. It is typically used as a way to understand and prioritize different innovation opportunities, as well as to allocate resources and efforts towards the most promising areas.
There are many different variations of innovation matrices. One useful type involves plotting innovation opportunities on a two-dimensional grid, with one axis representing the level of novelty (i.e. how new or innovative an idea is) and the other axis representing the potential impact (i.e. how significant or transformative the idea is expected to be).
A simple innovation impact matrix might have four quadrants:
- Low novelty, low impact: This quadrant represents ideas that are not particularly new or innovative, and are not expected to have a significant impact. These ideas might be useful for incremental improvements or minor optimizations, but are unlikely to drive significant growth or change.
- Low novelty, high impact: This quadrant represents ideas that are not particularly new or innovative, but are expected to have a significant impact. These ideas might involve leveraging existing technologies or approaches in new or creative ways, or might involve making small but significant improvements to existing products or processes.
- High novelty, low impact: This quadrant represents ideas that are highly innovative, but are not expected to have a significant impact. These ideas might be interesting or exciting, but might not be practical or feasible to implement.
- High novelty, high impact: This quadrant represents ideas that are both highly innovative and are expected to have a significant impact. These ideas are the most promising and should be given the most attention and resources.
Innovation matrices can be used to help organizations prioritize their innovation efforts and allocate resources towards the most promising ideas. They can also be used to identify areas where the organization may be lacking in terms of innovation, and to develop strategies to address these gaps.
Innovation Impact Matrix Examples
Here are some examples of innovation opportunities that could be plotted on an innovation impact matrix:
- Low novelty, low impact:
- Adding a new color option to an existing product line
- Improving the packaging for an existing product to make it more environmentally friendly
- Low novelty, high impact:
- Introducing a new marketing campaign for an existing product that significantly increases sales
- Implementing a new supply chain management system that significantly reduces costs
- High novelty, low impact:
- Developing a new type of product that uses cutting-edge technology, but that is not practical or feasible to manufacture or sell
- Creating a new business model that relies on a technology that does not yet exist
- High novelty, high impact:
- Developing a new type of product that disrupts an existing market and generates significant growth
- Implementing a new business model that significantly reduces costs and generates new revenue streams
These are just a few examples and there are many other possibilities. The key is that the ideas represent a range of novelty and impact, and that they can be plotted on the matrix according to these dimensions.
How can Innovation be Measured?
Charting an innovation impact matrix obviously requires that it should be possible to objectively assess innovation and its impact. However, innovation can be a difficult concept to measure, as it is often subjective and can involve many different factors. Nevertheless, there are several approaches that can be used to measure innovation, depending on the specific goals and context of the organization. Here are a few examples of ways to measure innovation:
- Output measures: These measures focus on the tangible outcomes of innovation, such as the number of new products or services introduced, the number of patents filed, or the sales of new products. Output measures can be useful for tracking the results of innovation efforts, but they do not necessarily capture the underlying processes or factors that contribute to innovation.
- Process measures: These measures focus on the internal processes and practices that support innovation, such as the number of ideas generated or the amount of time spent on innovation activities. Process measures can be useful for tracking the progress and effort of innovation initiatives, but they may not directly reflect the outcomes or impact of innovation.
- Impact measures: These measures focus on the impact or value of innovation, such as the extent to which it drives growth or market share, or the extent to which it improves customer satisfaction or loyalty. Impact measures can be useful for evaluating the overall value of innovation efforts, but they may be difficult to quantify and may require longer-term analysis.
- Perception measures: These measures focus on how innovation is perceived by stakeholders, such as employees, customers, or investors. Perception measures can be useful for understanding how innovation is viewed by different groups and for identifying areas for improvement.
Ultimately, the most effective approach to measuring innovation will depend on the specific goals and context of the organization. It may be useful to use a combination of different measures in order to get a more complete picture of innovation performance.
How can Companies be More Innovative?
While the purpose of the innovation impact matrix is to help organizations prioritize their innovation efforts and allocate resources towards the most promising ideas, the question as to how an organization can become more innovative is of general interest. There are many ways that companies can encourage and support innovation. Obviously the specific strategies and approaches that are most effective will depend on the organization’s culture, industry, and goals, but nevetheless, here are a few ideas for how companies can be more innovative:
- Foster a culture of creativity and innovation: Encourage employees to think creatively and to come up with new ideas, and create a supportive environment that rewards and recognizes innovation.
- Encourage risk-taking: Encourage employees to take calculated risks and to try new things, and create a culture that is tolerant of failure as a learning opportunity.
- Promote collaboration: Encourage employees to work together and to share ideas and resources, and create opportunities for cross-functional collaboration.
- Allocate resources towards innovation: Set aside time, money, and personnel to support innovation efforts, and prioritize the most promising ideas.
- Encourage continuous learning and development: Support ongoing learning and development for employees, and create opportunities for them to stay up-to-date on the latest trends and technologies.
- Foster partnerships and relationships: Look for opportunities to collaborate with external partners and to leverage their expertise and resources to drive innovation.
- Encourage experimentation and iteration: Encourage employees to test new ideas and to iterate on them based on feedback and results.
By adopting these strategies, companies can create a culture and infrastructure that supports innovation and helps to drive change. It’s worth noting that innovation is not a one-time event, but rather a continuous process that requires ongoing effort and attention.
Conclusion
The innovation impact matrix is a tool for classifying and organizing different types of innovation according to their level of novelty and impact. Innovation can be nurtured by fostering a culture of creativity, collaboration, and partnerships and encouraging risk-taking, continuous learning, and experimentation. Companies can support innovation by adopting several of these strategies and use the innovation impact matrix for allocating resources towards the most promising ideas.
You may leave a comment and let me know if I missed any important points, as well as share your thoughts and opinions on the subject.