BearingPoint's 5 Steps to Innovation Success

"As technology drivers of market discontinuity become less differentiated and have shorter life cycles, the premium will shift to people and process…."

--Michael Lyman, head of Global Management Consulting, BearingPoint

Ask executives what worries them the most and it is probably the idea that they will become obsolete.

When McKinsey & Company asked almost 3,500 global executives what single factor they see as contributng most to the accelerated pace of change. the answer that received the most responses (24%) was: innovation in products, services, and business models. (See "An executive take on the top business trends : A McKinsey Global Survey" in the April 2006 McKinsey Quarterly.)

What would be interesting is to drill down and ask exactly which type of innovation is more compelling: products, services, or business models?

Apparently it makes a difference, according to BearingPoint's Michael Lyman. His commentary in the current issue of the firm's online newsletter lists five steps companies can take — not to innovate per se — but to use innovation to create favorable discontinuities. In other words, to make others obsolete so you don't become obsolete.

And what kinds of innovation have a bigger, longer lasting, and more favorable effect than others? Michael says that technology (i.e., product) is becoming less important and people and process (i.e., business model) more important. For example, technology is becoming easier to copy, but knowledge and structure are not. (His last two steps rely heavily on tight relationships.)

The discontinuity effect of innovation is more important than the innovation itself. And different kinds of innovation present greater opportunities for using that effect. Cool.