In this episode of Future Forecast, Isabelle Ringnes is joined by Nathan Furr, a professor of innovation and strategy at INSEAD, to talk about how companies can navigate through technological change and be innovative in a way that will work.
Furr certainly knows about successful innovation; his teaching allows executives to embrace innovation, he is an award-winning author on innovation and sits on the investment board of the Kickstart Seed Fund. He has a PhD from Stanford University and he is the founder of the International Business Model Competition.
- TUNE IN to understand how innovation will be successful in an ever changing environment. Learn from Nathan Furr whose research focuses on innovation and strategy.
A hybrid strategy to change
Change is everywhere, stresses Furr, so the need to innovate and adapt is crucial. He says that, while businesses must adapt to change early, having the idea is not enough. It is about having a deep understanding of the customer, and not about scaling up any idea to send out to the market in a frenzy.
There are several factors that prevent change, says Furr. They seem simple but difficult to get out of:
- Being stuck in the day-to-day - prevents possibilities to be spotted
- The barriers to get out of a fixed routine
- Fear of the unknown – the human brain is wired to fear the unknown
Getting out of a rut and into action needs a combination of the familiar old and the unfamiliar new; a hybrid strategy, says Furr. He points to Toyota as an example, where the spark of the electric car came long before anyone else was thinking about it. In 1997 Toyota created the first hybrid car; part fuel, part electric. Furr explains that combining the old and the new is the bridge to the future.
“It takes time for disruptions to occur and often in that middle space [we can] borrow elements of the past and the future.”
Knowing the core problem
Furr says that company commonalities become visible when looking at successful innovators. The problem that needs to be solved must lie at the forefront. Furr, highlights that businesses should act as start-ups, because start-ups organize themselves through the problem at hand, and the problem needs to be fixed.
He explains his thinking through the example of a software company, where its purpose is to develop software because there is a gap in the market. It will organize around existing problems in the market and the capabilities needed to solve these problems. A business model should look at how to optimize user experience and a team must be structured around solutions.
However, there is no one size fits all solution, but there are options, for example, a business can consider incremental or radical innovation.
Incremental can simply be a drawing of a new product to show the customer. Radical can be an actual prototype, so the customer can test-ride it. Here, the real experience is needed and the customer’s feedback is crucial.
Furr points out that for a business to get into gear, its teams must be aligned (companies often struggle with this). There are different ways of composing teams, and Furr believes that teams should be put together strategically. Each type of team will bring a piece of the puzzle, and include:
- Lunatics – question everything and think big where anything is possible.
- Experts – understand what the company has to offer and they take action to get things done.
- Connectors – connect company knowledge and the other teams.
Action is needed to implement low cost experiments to test hypotheses early, this comes with knowledge about what the customer is trying to achieve.
Furr concludes that even though we live in uncertainty and rapid technological change, the barriers to try new things are lower than they have been, so a risk can be taken.
“See the possibility and embrace that.”
- Hear how innovation will be successful in an ever changing environment. Learn from Nathan Furr whose research focuses on innovation and strategy.
Text by Rosanna Bueler Mount