Innovation Evolution Maps
Today we look at Innovation Evolution Maps, which is the following toolkit in our models and framework anthology. This map is very useful because it really helps to understand and underlining the link between financial success and innovation; in addition to that it also helps to provide a perspective of our target industry evolution, by contextualizing and visualizing the innovations launched during the time window. It finally also helps visualizing which companies are driving the evolution of a sector, because their innovations set the pace for the followers.
The Innovation Evolution Maps stem from taking a referenced time-frame, which is usually one/ two decades if not more. In addition to that Innovation Evolution Maps require financial information regarding key players and information about innovations launched, whether they are regional, national or global, from these key players and into the relevant space.
The second step is to cluster the innovations into relevant segments. The clustering might be done on the basis of the company – as in our example in the image – or on the basis of the players and by sub-clustering them by success: so foe each company we would identify Super Hits – the innovations which were very successful in the marketplace – Key Innovations, Ongoing Innovations, Product Updates, or Unsuccessful Innovations. Quite naturally the sub-clustering could take in account taxonomies such as radical vs. sustaining vs. disruptive innovations; the segmentation we use, really depends on the objectives we want to achieve but in this sense the framework is quite flexible. Once the cluster are defined, the following step is to map all of this information on a timeline within the relevant and appropriate cluster.
On top of our visualization map, we will add a financial chart with the corresponding time period. Here, we plot the stock prices of the companies, or the revenues, or whatever relevant and measurable information, even market shares – it depends on what information is available and of potential interest. For business units, we usually use revenues, in which we look at financial performance over time and get an idea from the visual map of the relationships between our innovations and our measures. We also identify how we innovated (what kind of efforts our target company or our company was involved in) versus the types of efforts our successful competitors were involved in.
The Innovation Evolution Maps are proven to be very useful in understanding when companies are focusing too much on optimizing their portfolio rather then thinking outside the box. We once built an Innovation Evolution Map for TV & Accessories, across the 90s and the first decade of the new millennium. We looked at Philips, Sony, LG, Samsung, but also Apple and Netflix. If you try to replicate the exercise, it is quite obvious that the focus of the traditional consumer electronics plays, when in adding more and more devices to the ecosystem: besides the radical upgrade of Flat Screen TV, their innovation efforts spanned from VHS, TiVo’s, to DVD players and recorders; from Home Theater Systems, to Blur-Ray Technology, none of which really built on a strong consumer insight. While Apple and Netflix emerged with alternative models, based on consumers needs and technological convergence, by blurring the boundaries of the traditional TV model.