Recently, innovation-3 conducted a one-day workshop with some 30 practitioners from leading Central European firms (see HERE). We looked at how radical innovation can be achieved via a cross-industry / cross-funnel approach, by a Big Data approach and by the confluence of these two, Big Data-enabled, industry-crossing Business Model Innovations. Within this context, we focused on three main topics:
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- How are leading firms position cross-industry / cross-funnel and Big Data in their search for radical innovations?
- What are the biggest challenges for opening up to cross-industry and cross-funnel innovation?
- What will be the future applications for Big Data in the context of radical innovation?
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Cross-industry / cross-funnel innovation defined
Cross-industry is not a new thing: So for instance, some years ago a leading German Laundry & Home care firm used insights from the food industry to develop a uniquely extruded detergent; recently, a leading chocolate manufacturer used aerodynamic research from a helicopter manufacturer to develop a new manufacturing process in which chocolate is twirled instead of dripped; and some years ago, a prime Chemical firm developed self-healing polymer coatings for oil pipelines that mimic the self-healing mechanisms found in the human body.
The rationale behind cross-industry innovation is to use a certain “cognitive distance” between the firm’s methods, knowledge and competences, and those of “unusual co-innovation partners” in order to come up with radical and breakthrough product and process innovations. This rationale builds on scientific research showing that there is an inverted U-shaped relationship between cognitive distance and innovation performance. In other words, one way to optimize innovation performance is to search for co-innovation partners outside the existing value network of suppliers and customers in the own industry.
We had an interesting discussion on the ambitions of some leading firms that take cross-industry innovation to the next level: They extend cross-industry innovation thinking into the very fuzzy part of the fuzzy front-end – into the “Discovery” and “Ideation” phases and – which we like to call cross-funnel innovation.
The top-10 challenges in cross-industry / cross-funnel innovation
Based on the innovation-3 model for cross-industry / cross-funnel innovation, we identified the top 10 challenges that firms face:
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- Struggle with balancing incremental against radical innovation
- Limited clarity on where to be open and where not
- Weak systems for managing the fuzzy front-end of the funnel
- Limited clarity on how to integrate virtual networks in existing frameworks
- Limited experience in innovating on virtual platforms
- Rigid systems for managing the efficient back-end of the incremental funnel
- Industry-specific language and innovation / project management systems
- No solid experience in dealing with IP issues in cross-industry settings
- Limited experience on how to move outside of defined search fields
- No clear picture on domains and topics for cross-industry innovation
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Big Data (in the radical innovation context)
Big Data itself is one of the current megatrends in the ICT industry. Big Data aims at extracting meaningful signals from the noise of data and has found already numerous applications in dramatically improving operations, customer relationship management and decision-making. Key drivers of Big Data are an exponentially growing volume of data and equally exponentially growing capabilities to analyze these data in real time.
Within the context of radical innovation, in the recent past firms used Big Data for finding the best “unusual co-innovation partners” for cross-industry innovation (see above) and for generating new insights via mesh-ups of data coming from transactions, social networks, machines, etc.
Cross-industry and Big Data: The common ground
We had a very lively discussion at radical innovations that build both on cross-industry / cross-funnel innovation and on Big Data. These are new industry-crossing business models with a Big Data foundation. One example: An airplane manufacturer co-innovates with a premier travel luggage manufacturer and the relevant air passenger transport authorities to come up with a smart luggage that will dramatically improve travel experience. With this smart luggage travelers can lock and seal their luggage at home, including printing of the luggage tag (drop-off ready) and have full information at any time about the exact position of their luggage. In the future, this smart luggage may be rented to the traveler and will be picked up at the traveler’s home by a logistics firm.
The following image shows this common ground between cross-industry / cross-funnel and Big Data in radical innovation:
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Future applications for Big Data in radical innovation
We also spent some time in discussing the most likely applications for Big Data in the context of radical innovation. In the view of the practitioners these will be:
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- Comprehensive product tracing „birth to birth“, extending existing cradle-to-grave-concepts
- New business models: “Data Mart provider”, which may become a new business model for Financial Services firms
- Drive and support ideation with intelligent, real-time patent search, including automated translations (EU / Japan or China)
- Yield Management 2.0 (e.g. base sales price of ticket not only on booking situation but also on desired legroom)
- Internet Of Thingscontent
- More intensive man/machine interactions, e.g. in eHealth
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