According to a study, companies that adopt a market-driven approach to innovation delivered
shareholder returns of 150 percent while the S&P 500 has delivered 14 percent. Most people think that
innovation is like winning the lottery – brilliant people like Steve Jobs just know that the market needs
an innovation like the iPod or iTunes. Successful companies know that innovation is a discipline, not an
accident. A key aspect of this discipline is developing superior market-sensing skills and peripheral
vision. There are three techniques that are helpful to build this capability in your organization.
Listening to All Voices
A foundation of market-sensing and peripheral vision skills is listening to all types of voices in your
organization that can provide insight into market needs. For example, drug maker Organon was
developing a new antihistamine. Unfortunately, the clinical trials did not go well. A secretary who
helped administer the trial noticed that some of the participants were particularly cheerful. An
executive noticed her feedback and they pivoted the research into an antidepressant that became
known as Tolvon. Viagra was originally developed to treat high blood and angina before the benefits of
its current usage were discovered.
In their book Peripheral Vision: Detecting the Weak Signals That Will Make or Break Your Company, by
George Day and Paul Shoemaker, they identified nine techniques that organizations can use to develop
enhanced peripheral vision for innovation.
These techniques include:
- Look for game changing information at the periphery of their business
- Search beyond the boundaries of current, prevailing views
- Recognize potential changes before the competition does
- Connect the dots of incipient trends by triangulating weak signals
- Entertain multiple hypotheses about causes of change
- Encourage mavericks in their company to say what they really think
- Organize “paranoia sessions” to tap wisdom inside their company
- Build wide networks inside and outside the organization
- Remain vigilant and curious about signals from many spheres
Think the Unthinkable
Scenario-based thinking was pioneered by Royal Dutch Shell in the 1960s. It is just as valuable today as
it was then. Scenario based strategy looks at combinations and permutations of social, economic, technological, or political changes into possible scenarios. While some scenarios are plausible many are
unlikely. By examining a set of scenarios, organizations can discover unexpected, but important
situations that they need to deal with.
One example of Think the Unthinkable is Zero Carbon Natural Gas. Natural gas is used in an ever-increasing amount of power plants. While it is more eco-friendly than coal or oil, it still emits carbon
dioxide. A recent article noted:
“A natural gas power plant has come online that expects to capture 100% of its own carbon
dioxide output. And unlike conventional “clean” fossil fuel plants, it won’t need an extra, energy-
hungry facility tacked on to do it. Instead, the carbon-capture system is built right into the design of this Texas plant that the power company says will actually make the plant more efficient than conventional gas plants.”
Natural gas powered power plants that do not contribute to greenhouse gases? That is unthinkable.
Scenario based planning is one tool organizations should have in their portfolio to help examine edge
case scenarios that might spark innovation ideas.
As the dotcom market heated up, General Electric started a company-wide initiative known as
destroyyourownbusiness.com. Basically managers were tasked with imagining how a competitor or
startup could destroy their business. This is basically another technique managers can use to spur out-
of-the-box thinking. By considering how a competitor might exploit the inherent weaknesses in their
business, organizations can begin to identify ways to mitigate what be structural problems in their
business. For smaller players in a market, envisaging how they might disrupt the market leaders can
also lead to innovation ideas that previously might not have been considered.
Innovation is a key driver in the long-term sustainable growth of revenue, profits, and customer
satisfaction. Successful organizations realize that developing innovative solutions requires a myriad of
techniques in addition to the genius of inventors. Some of these techniques require companies to
develop excellent market-sensing skills. The application of these skills can help find sources of
innovation in the most unusual places.