The authors analyzed the mathematics of innovation as a search process for viable product designs across a universe of components. They then tested their insights using historical data from four real environments and concluded that companies can have an advantaged innovation strategy by using information about the unfolding process of innovation. But there isn't one superior strategy. The optimal strategy, they found, is both time-dependent and space-dependent. Based on their findings, the authors developed a five-step process for constructing an information-advantaged innovation strategy. Step 1. Choose your space: Where to play? It's not enough to analyze markets or anticipate customers'needs, the authors say. To innovate successfully, you also need to understand the structure of your innovation space. Step 2. Select your strategy: How to play? Measure the evolution of complexity in the space by analyzing the distribution of product sizes in terms of the number of unique components in products. If complexity is low and stable, the authors say, it's an indication that the space is still in its infancy, which argues for an impatient strategy. If complexity is high, then the space is maturing and a patient strategy will be the best approach. Step 3. Apply your strategy: How to execute? If you follow an impatient innovation strategy, the objective is to adopt or develop components that enable the company to bring relatively simple products to market quickly. Managers should ask themselves how they can be first. However, if the characteristics of your chosen innovation space imply that a patient strategy is more appropriate, your objective should instead be to maximize future innovation options. Step 4. Sense shifts and adapt: How to extract a switch signal? You need to monitor the complexity of your innovation space and compete on access to information in order to detect valuable strategy-switching signals before competitors.
Few people would argue that we live in a time of growing inequality and uncertainty. Societies are being challenged in ways we have not seen for decades-with nationalistic rhetoric and agendas from the far right and a deep distrust of business, globalization and technology from the far left. Many worry that such a polarization of public opinion and policy making could introduce new risks that deter investment-which is already far too low, judging by current interest rates-and undermine future prosperity. The authors, from The Boston Consulting Group, present a 'leadership agenda for shaping the future', consisting of six principles.