OUR APPROACH

• How can we speed market penetration for a new concept or technology?
• What assumptions should we test first?
• What are the logical milestones along our path?

How we respond

Innosight specializes in helping companies speed through the fuzzy front-end of innovation and bring ideas to market. One of our core beliefs is that companies rarely lack attractive ideas to create new growth businesses, however, an overwhelming amount of evidence suggests that companies entering into new markets tend to start with the wrong strategy. Although no one would willingly pour money in a fatally flawed strategy, companies time and again make this mistake when they step up investment in a strategy too early.

The key, then, is figuring out quickly how that strategy is wrong. To increase the chances that high-potential ideas get taken to market with the lowest amount of risk and the highest potential for success, we advocate following an iterative, or emergent, approach that lets the right strategy bubble up from the market.. 

The emergent strategy process

Our work with a number of operating companies suggests a four step approach:

Step 1: Comprehensively map out assumptions and risks – Before you head in a new direction, take a careful inventory of the good, bad, and unknown elements of a strategy. It pays to be expansive when developing the list of assumptions and risks.

Step 2: Identify priority areas – A list of 100 assumptions and risks can be daunting. It is critical to prioritize that list to pick out the assumptions that you need to learn more about or the risks that you need to mitigate first.

Step 3: Design and execute knowledge-building exercises – Smart experiments and risk mitigation strategies are at the heart of a good emergent strategy. Instead of risking resources on uncertain strategies, companies can invest a little to learn a lot about key uncertainties in their approach. Experiments can range from simple activities such as small focus groups to more complicated activities such as launching a localized test market.

Step 4: Absorb and re-direct – The final stage of the process utilizes the learning of the knowledge-building exercise. Re-directing a strategy can be emotionally wrenching for many leaders. Managers who have dedicated time and energy to a particular path can cling to that path even in the face of countervailing evidence. Success requires an odd mix of humility (recognizing that despite your best efforts your initial approach was wrong) and confidence (not giving up in the face of disappointing results).