Defend yourself with Transformational Product Innovation
At some point, every product will reach a plateau and start to decline. If your company only offers one Core product, this decline can severely impact your business.
So how do you protect your business against the natural lifecycle of a product?
The best solution is to be proactive and initiate your own innovation. This might involve cannibalizing your own product before it reaches decline and potentially being replaced by a competitive alternative. One effective approach is to create a product innovation portfolio. The Innovation Ambition Matrix, developed by Bansi Nagji and Geoff Tuff, is a great model to follow.
The Innovation Ambition Matrix is a tool used to map out current and future products and ideas. The Core innovation initiatives refer to the ongoing projects that you are currently working on. These projects involve making small changes to existing products to facilitate growth during the Scale phase. As previously mentioned, Snapchat serves as a prime example of this.
There are also the Adjacent innovation initiatives, which involve either expanding existing products into new markets or creating new products for existing markets. This can help diversify your product portfolio and scale your business beyond its current offerings.
Next, there are Transformational product innovation initiatives, which involve creating entirely new products that target new markets. These innovative ideas typically take 3-5 years to launch.
Investing in products within all three spaces can lead to continual growth for your business. As shown in the attached figure, your Core products represent your current trajectory of rapid growth, which will eventually plateau and decline. Adjacent products will start in the product discovery phase with little growth, but over time they will begin to scale and overlap with the plateau of the Core products. Eventually, Transformational products will replace the Adjascent products, and this pattern of continuous growth will ensure the ongoing success of your organization.
Amazon is the master of this. It was once a website that sold books and DVDs, it now includes products like the Kindle, Amazon Prime Video and Amazon Web Services. As Jeff Bezos famously said, “At Amazon, we like things to work in five to seven years. We’re willing to plant seeds, let them grow and we’re very stubborn. We say we’re stubborn on vision and flexible on details.”
Ensure continued growth with the Innovation Ambition Matrix
