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Not inside the box, not outside the box...

Innovate Around the Box

What does it mean to innovate around the box? It’s the creation of a family of products, services, experiences, and other innovations that together deliver a complete solution to the customer. It’s not “inside the box” innovation - the incremental improvement of current products for current customers. It’s also not “outside the box” innovation – the creation of disruptive, revolutionary new products or services. It’s the strategy that successful companies as diverse as LEGO, Apple, Novo Nordisk, Sherwin Williams, Gatorade, Victoria’s Secret, and USAA have used to grow sales and profits and win in their markets

How do you do it?

The process is easy to describe, but difficult to execute

Step 1: choose the product or service you want to innovate around

Start by choosing one of your company’s “crown jewels” – an existing product or service that’s important to your company. It can be a mature product that’s becoming a commodity, an existing product that’s being challenged by new competitors, or a new product that could open up an important new market.

This “key product” should be:

Central to or consistent with your business unit’s identity
Compatible with your brand
Stable
Autonomous (e.g., not necessarily part of another product or service)
Important to your customers

Step 2: What is your business promise, and who are you promising it to?

What are your customers trying to accomplish when they buy your product or service? Why are they “hiring” it?

The business promise is not a brand, although it should be consistent with your brand. It is not a “job to be done,” but it summarizes the jobs that your customers are trying to do.

Start by choosing one important customer segment for your key product. How would you summarize what these customers are trying to accomplish when they’re using your product or service?

Step 3: What complementary products or services would help your key product succeed?

Accept your current product as is. What other products or services would help your current customers get more value from it? These may be products, services, experiences, or data.

A few questions that can help stimulate ideas:

What frustrations or complaints do your current customers have?
When a new customer tries to buy and use your product for the first time, what difficulties and challenges do they encounter?
What other products or services do customers currently buy that complement your product?
What other channels could you use to deliver your product?
Pretend you had to give away your product for free. What other ways could you make money?
What information could you provide that would help your customers?

Step 4: Bring the complementary innovations to market

This can be the most difficult step. The roles, processes, metrics, policies, and beliefs that make a company good at product development can hinder efforts to develop a family of complementary products and services.

A few recommendations:

Start small. Choose a few complements that you can implement quickly and cheaply.
Be humble about your ability to predict success. No one is good at predicting innovation success, but you’ll be especially limited as you move away from your core expertise.
Do quick, cheap, knowledge-generating tests to learn what works.

To learn more, get a free copy of the first chapter of The Power of Little Ideas