Our future is not in incremental improvements. It is in BREAKTHROUGH Innovation
Our future is not in incremental improvements. It is in breakthrough innovation, this is the basis of this short article.
An innovator must ensure they focus on both the core business and the future. The future cannot happen without the core.
But the future is developed in the now and that’s the problem. What should we be doing now to ensure we have a future?
“As much as we might pay lip service to the fact that the future will differ dramatically from the past, we often behave as though it will be exactly the same.”
There is a stress between what we have to do now to continue on as an entity and what we need to be doing now to create our future along with the things that we are doing that get in our way of doing any of it.
How do we create the future while managing the present?
Professor Vijay Govindarajan developed a framework called The Three Box Solution. It is a method to simultaneously meet the performance demands of your current business — one that is still flourishing — while dramatically reinventing it for the future.
It’s about managing preservation, destruction, and creation.
In each box there is a purpose that needs to be performed to lead a sustainable business:
Box 1: The Present Box
Manage the present core business at peak efficiency and profitability.
Box 2: The Past Box –
This is the bridge between the present and the future
Selectively forget the traps of the past by identifying and divesting businesses and abandoning practices, ideas, and attitudes that have lost relevance in a changing environment and would otherwise interfere with your focus on inventing the future.
Box 3: The Future Box — Generate breakthrough ideas and convert them, through experimentation, into new products and businesses. It’s not about predicting the future but it is about being prepared for circumstances you can not control.
The Three-Box Solution requires an ability to think and act simultaneously in multiple periods. Each requires different leadership and you must maintain balance across the 3 boxes. It’s a balance.
Most businesses focus on the core, Box 1 — preservation. And understandably so: the rewards are immediate, it is a known quantity and the risks are relatively low. Here’s the challenge:
The greater your success in Box 1, the more difficulties you are likely to face in conceiving and executing breakthrough Box 3 strategies. This “success trap” typically arises not from willful intention but from the overwhelming power of success that the past has brought.
The most pernicious effect of the success trap is that it encourages business to suppose it already knows what it needs to know to succeed in the future.
Boxes 2 and 3 are about creating the future. In Box 1 there is a value in sticking to what you have been good at, but in Box 3 you throw it out. The idea is to be building the future continuously instead of waiting until you are forced to do something. By then it is generally too late.
Boxes 2 and 3 are easy to ignore because “when you neglect the future today, you don’t see the damage today.”
Box 2 is especially difficult because it is hard to give up on the assumptions that got you where you are today. Our resistance to selectively give up the past is arrogance. It reflects a desire to control our world. But it changes and we must strategically change with it.
Box 2 issues limit our futures. They are obstacles to Box 3. “It is harder for an organization to admit to itself that it’s time to stop doing something than to know when it’s time to invent something new” in part because we have so much invested in the past. It becomes an emotional issue.
The 3-Box Solution is a daily operational balancing act.
- For leaders, it means: Avoiding the traps of the past
- Being alert to emergent changes to technology, culture, markets, the economy, consumer tastes and behaviour, and demographics
- Building the future every day
- Experimenting and learning — test the most critical assumptions as early and as inexpensively as possible
- Practising planned opportunism — preparing for futures you cannot predict
- An innovator must ensure they focus on both the core business and the future. The future cannot happen without the core.
The findings of this blog were taken from the article written by Professor Govindarajan and simply outline that organisations must and can manage the core business and innovation.
