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Future-Driven Innovation

17 Jun

I decided to write about future-driven innovation because most of the tools that we use for strategy  and innovation planning have a short term view. SWOT, PEST and other methods gives us great insights on how we are today and the gap we need to fill today to not loose ground in the market, these tools do not seem to fit an innovation strategy, if we use them to feed a long term innovation plan, the result will be an imbalanced plan doom to fail.

The term Future driven-innovation was first coined by the Copenhagen Institute for Future Studies in 2009 member´s report, in it the institute says trends and innovation are closely linked. No matter whether we speak of open-plan kitchens or technological innovation, the innovation is a responseto a trend. Apple chose to focus on the iPhone instead of PDAs because it expected the integrated mobile phone to be the future. The report points that success does not occur in a cultural vacuum, but represents an identification of a need-driven possibility space. The more style-conscious consumer that Apple appeals to is, for example, shaped by the megatrends individuality and increasing affluence.

But, how can we even grasp an idea of how the future will be in order to react?  Over the last three decades, Shell has been the pioneer in identifying emerging challenges to foster adaptability to change. They use scenario planning as a way to look into probable futures.

According to CFSI scneario planning is based on different projections, and then carefully examine the assumptions underlying the projections and the events that may affect them.In this way, we can work with transition scenarios that identify the steps that lead to a desired future (end state). This method makes it possible to create  indicators and cardinal points that help the company monitor progress on future innovations.

Overview of the process:
1. Identify and, if possible, quantify the trend
2. Identify actors influencing barriers and accelerators
3. Create different scenarios for the future development of the trend
4. Make a critical assessment of the preconditions for the different scenarios
5. Identify competitors
6. Construct transition scenario with time-to-market based on various developments
7. Monitor players. Are they addressing key barriers? Expect innovation from competitors.

In order to better understand its practicality I will give you an example: last year I had the chance to work with a logistics company that was struggling to make profits despite dominating the mass delivery of bank statements in México, after a scenario planning we idetify that trends such as digital documents, market fragmentation and increasing request of personalization by the customers was pointing to a future scenario were the mass market of deliveries no longer existed, instead the market would be a highly customized market of logistigs where products like documents will no longer needed to be delivered at least no in the traditional way. Long story short the company decided to create an innovation center fully dedicated to develop solutions for this future, nowadays this company delivers products bought online, mobile phones, laptops, sells RFID solutions and most important is now is making profits.

We can say that future-driven innovation is about identifying trends, how they evoluve and what outcomes will be if they merge between them. This analysis help us to identify future scenarios and what role do we want to play in them as company in order to draw the innovation path we must follow. With this information at hand we can now develop long term plans for our innovation efforts with strong focus in the trends that will shape the markets. I must say however that the key is not to loose sight of the cardinal points that help us to monitor possible shifts in future scenarios in order to to reassure the innovation path or to make proper adjustments. Another warning I give you is that we must avoid to chart only the obvious future scenarios, let´s be bold and analyze all possible outcomes to foresee possible uncertainties in order to have responses prepared.

Jesus Mascareno