Finding a Lower-Risk Path to High-Impact Innovations

Significant leaps are rare occurrences in most domains, the authors note, and the accepted wisdom involving risk and return has led many to assume that high returns from breakthrough innovations are only attainable with high risk. However, the authors have found that important opportunities can arise when the focus is placed not only on the investment but also on how it is pursued. Rather than looking at so-called "moonshots,"they examine a proactive and comparatively less risky approach to pursuing high-impact innovation -one that strings together "lily pads"of capability-building investments, technical and conceptual advances, and market explorations into what the authors call "enabling innovations." With the lily pad strategy, innovators pursue a series of lower-risk initiatives, rather than risking large amounts of resources on one path. To do this, they must link the current capabilities of their solutions, whether in parts or as a whole, to end-user needs in application spaces ready to accept them. The goal isn't to satisfy a specific end-user or application (although innovators typically do have a long-term target end-user or application in mind). Rather, it's to satisfy any end-user who will adopt now. The reason is simple: Adoption leads to resources and/or cash flow, which allows the work to continue and creates a "lily pad"on which the innovation initiative can "land"on its way to a larger goal. The idea is to jump across lily pads -even in spaces that may seem of secondary strategic importance -as early as possible as a means of building interest in the concept (internally and externally). Drawing on examples such as the development of X-ray and GPS technology, mobile robots, crowdsourcing, and microlending, the authors argue that it's useful to think about innovation impact proactively along four dimensions: reach, significance, paradigm change, and longevity.

• Disruptive innovation
• Risk management