How to innovate your business? Consider these models

As the saying goes, if you don’t know where you are going, it’s hard to get there. And it’s even tougher if you’re trying to change direction.

But the inertia of the status quo is often hard to break. Hence the value of strategic planning. For any organization, community or individual, the process of mapping out the future can be a constructive process – recognizing that there are invariably twists and turns along the way.

Getting to a more productive, purposeful place from the current present is what innovation is all about. Innovation is about coming up with new and creative ways of doing things that yield better outcomes. As the world changes, we need to adapt or risk falling behind.

Within an organizational setting, this means constantly improving one’s products or services to increase one’s competitive position and long-term impact. There is, of course, risk in this. If you kill off an existing product without having a proven new product, for example, then you can lose market position and valuable time and money. The same is true of jumping out of a job you may not like without a clear next step.

Balancing the risk of staying stuck versus moving forward into uncharted territory is what author Tendayi Viki calls building an “innovation portfolio.” In a recent article, Viki draws on a number of existing strategic frameworks for companies interested in maintaining their competitive edge. His work is equally applicable for individuals or communities committed to adaptation and progression.

To help cultivate an innovation mindset, Viki points us to Bansi Nagjii and Geoff Tuff’s Innovation Ambition Matrix, as described in Harvard Business Review. In short, there are three main types of innovation: core, adjacent and transformational.

Core innovation includes making small improvements to existing activities that a company, community or individual may be engaged in. For an organization, this means improving current products or services to existing customers. For a community, this may mean adding playground equipment to an existing park or improving services to current residents. And for an individual, this may include making small changes within an existing job to improve quality of life. According to Nagjii and Tuff, we should be spending about 70 percent of our energy on core innovation.

Adjacent innovation means leveraging a core competency and applying it to new markets or developing new products for current markets. For communities, this could mean re-purposing main street buildings to create a more attractive, higher-density home for existing businesses or finding creative ways to attract new businesses and residents. For individuals, this may include finding an opportunity to test out a new entrepreneurial idea on nights and weekends or building out a new skill within your existing job that can accelerate opportunities for advancement. It is recommended we spend 20 percent of our time on adjacent innovation.

With the final 10 percent of our time, Nagjii and Tuff recommend we focus on transformational innovation. For companies, this could include developing a new product that can be tested in an entirely new market (sometimes referred to as “blue ocean strategy”). For communities, this is about radical reinvention – imagining entirely new ways of structuring downtowns and attracting a different type of resident (for example, Durham reinventing itself from a tobacco town to a booming entrepreneurial hub where life-science incubators occupy old warehouses). For the individual, this can also be about reinvention and preparing for a fresh start in a new chapter of life.

Transformational innovation is clearly the hardest and most risky stage – which is why we shouldn’t leap right into it. But neither should we keep our eyes forever trained on the present. This is why a “balanced portfolio” of innovation is encouraged.

As we look to the future, another model to consider is the Three Horizons framework introduced in the book “The Alchemy of Growth.” Like the Innovation Ambition Matrix, the Three Horizons concept outlines how we can manage for future growth without stalling in the present. In this model, Horizon 1 is about maximizing performance within the current context, Horizon 2 includes investing in and building out new businesses, concepts and ideas, and Horizon 3 focuses on ground-breaking ideas that anticipate future trends in a different world.

Change in any context is hard. But the risks of not adapting are significant. Without continuing to innovate, companies die, communities stagnate, and individuals get stuck. By creating the appropriate innovation portfolio, we can increase our chances of sustained success.

Christopher Gergen is CEO of Forward Impact, a founding partner of HQ Community, and author of “Life Entrepreneurs: Ordinary People Creating Extraordinary Lives.” Stephen Martin is deputy chief of staff at the nonprofit Center for Creative Leadership in Greensboro. They can be reached at and followed on Twitter through @cgergen.