• Where are the circumstances in which our products might be consumed but consumers are resolving the struggle in other ways? Innovators who prioritize category expansion end up redefining existing categories and creating entirely new ones. CROSS-FUNCTIONAL COLLABORATION There are very good reasons why cross-functional teams do not routinely form in the natural course of business, as well as critical reasons why cross-functional teams provide a vital underpinning to the kind of success experienced by our Breakthrough Winners. In the context of established business processes producing existing products, the interfaces between functions in the value chain are specified and understood, and work that is performed by one functional team can be handed over to another group with confidence that nothing will be lost in translation. In the context of Breakthrough Innovation, however, these interfaces are not modular, and the implications of changes in one functional area can 50% OF SALES THROUGH CATEGORY EXPANSION BREAKTHROUGH WINNERS GENERATE NEARLY
THE NIELSEN BREAKTHROUGH INNOVATION REPORT 24 HOT TOPICS (CONTINUED) BREAKTHROUGH produce unexpected complications in another. The Lunchables Uploaded Spotlight provides a terrific example. Fifteen to 20 elements come together to form a Lunchables kit. Because Uploaded was a new-to-the-world offering in many respects, changes in product type and size had implications for the internal-operations team and for the packaging team. When the insight led to a new design for the overall container shape and structure, this similarly had unknown implications throughout the process. Oscar Mayer succeeded because cross-functional leaders sat together, and changes in one area were discussed in concert with implications for other functional areas. Interfaces that are modular can be efficiently managed through the linear process of normal operations. Interfaces that are interdependent, by contrast, require cross-functional communication and collaboration so that changes in one aspect of an initiative don’t cause confusion, waste, and delays in other parts of the new-product development system. Notably, Jobs Theory provides a “language of integration” whereby marketers and engineers, for example, can communicate with each other rather than talk past one another. PERVASIVE LEADERSHIP In the 2013 Breakthrough Innovation Report, we wrote at length about the specific role of leadership in Breakthrough Innovation. We return to it here because it is critical and, in too many organizations, is lacking. Many organizations segment their innovation portfolios into three tiers, but for the sake of simplification, we’ll reduce it to two: 1. Incremental, close-to-the-core innovations required to keep current customers happy and stay ahead of competitors 2. Breakthrough Innovations that expand existing categories or create new ones Pursuing both types of innovation requires an organizational ambidexterity that does not naturally occur in large-scale, productivity-minded enterprises.
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- Fall '15
- Brad Davis
- Breakthrough, Breakthrough Innovation, breakthrough innovation report, NIELSEN BREAKTHROUGH INNOVATION