Innovation: Envisioning the Opportunities

Searching for opportunities is an almost impossible task in the absence of clear guidelines for where to look and what to look for. The innovation process must therefore start with an attempt to create a vision of the company’s preferred areas of growth. The vision should be as concrete as possible. It should lead to an explicit set of strategic priorities and a broad map defining the scope of the new businesses that management wants to develop and the types of innovations it seeks. There are practical ways to generate, structure, and formalize such a vision. For example, it can be very helpful to answer four simple but essential questions:

1. What do we want to stand for as a corporation? This question forces management to make fundamental statements about the corporate identity, values, and beliefs it wants to convey. When it goes beyond very general statements, this high-level corporate vision can help chart the company’s scope, define its industry, and identify broad business priorities and preferred ways to compete.
   
   Answers to the other three questions (similar to those used by Clark and Fujimoto to define a product concept) will help refine the vision by identifying essential characteristics of the corporate path to long-term growth and renewal:
2. What kinds of products do we want to offer? This question raises the issue of the company’s product identity. Should our products share common characteristics or attributes, and if so, which ones? For example, should Rubbermaid define the scope of its business by the nature of its products and their materials (plastic and rubber products) or by other means (e.g., function or benefits)? Should Philips stick to its traditional unwritten rule that each of its products be “electric,” or should it look for another common thread across its many businesses?
   
   Answering this question is neither a theoretical nor an easy exercise for management. Historical assumptions about the company’s product identity create a mindset that gets passed down through several management generations. These assumptions deeply influence the scope of the innovation and product creation processes.
3. What kind of customers do we want to serve? This question determines the market emphasis of the company, hence the focus of its growth and renewal efforts. Do we want to serve the needs of specific industrial markets and, if so, which ones? Do we want to address the special needs of the professional market? What segments of the consumer market are we interested in serving? Or should we leave it up to our business units to decide?
   
   It is not surprising that the innovative concept of a personal or family copier should have originated with Canon rather than with, say, Xerox. The company already had a presence in the consumer retail market with its cameras. Extending its line of office products to the small business and consumer markets was more natural for Canon than for Xerox.
4. What do we want our products to mean to our customers? By answering this question, management complements the corporate vision with a benefit statement determining how it wants to be perceived by its customers. These benefits can be expressive, i.e., intangible and emotional, or they can be concrete and instrumental. They will influence the firm’s perceived personality and identity and determine the scope of innovation.

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