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Spotting New Innovation Opportunities
Frameworks & Methods | Strategic Foresight

How to Spot Innovation Opportunities

How to Spot Innovation Opportunities

A strategic innovation field, let’s call it “opportunity space”, can be found by connecting all the dots between bits of diverse information you already know and putting them together in a way that breaks a pattern. It is an advantageous space to innovate and grow and builds the starting point for the development of ideas for products, services, or new business models. So why is it so very important to take this upstream step in the innovation process?


Having Good Ideas Won’t Help Companies to Survive

If a company focuses on incremental innovation and simple stage-gate ideation processes only, it won’t keep up in the long run. Disruptive technologies or innovations boost new business models that change the game of existing industries like the space industry (SpaceX), the music industry (Spotify), the film industry (Netflix), or the banking sector (FinTechs), just to name a few. In addition to transforming a whole industry, disruptive business models also push and promote paradigm changes. When talking about innovation, existing companies should, therefore, be entitled to create those breakthroughs by themselves.

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The Innovator’s Dilemma

More than ever before, managers have to put an extra effort into creating holistic innovation management and sustainable innovation culture in the company in order not to disappear from the scene. They really have to mean it. Yet, this also means hard work. Lacking the necessary resources, being permanently overwhelmed by too much information, and in addition, constantly feeling the pressure to focus on operating and performing, many of them do not know how to confront and tackle this topic in the right way. Only a few companies are willing to pursue the whole innovation journey and embark on the adventures it may involve. The majority,  however, is still experiencing the “Innovator’s Dilemma” which means relying too much on old successes and thereby taking the risk of soon being overwhelmed by digital disruption and the increasing speed of innovation.

Is there a Pattern for Disruption & Breakthroughs?

There is no instruction or construction toolkit for disruption. Although many disruptive companies are based on new technologies, this path does not automatically lead to success. Disruptions arise when companies approach innovation in a fundamentally different way than their competitors. It is essential to recognize how new technologies can be used in such a way that they offer real and sometimes surprising added value for the customer. At the same time, the new technology must fit perfectly into the customer’s processes in order to create relevant value without great additional effort. What really matters is the total package of relevant customer value and the smooth use of new technologies.

Thus, instead of trying to make things better and better, successful companies focus on differentiation by taking the customer’s perspective and providing solutions for hidden needs. For example, what are the biggest challenges for clients planning and carrying out individual construction projects worldwide? Which solutions can they use to perform their tasks even better? To answer these questions, successful companies have to develop a deep understanding of the customer, his tasks, and daily processes and at the same time evaluate and interpret the latest technological possibilities and trendsHowever, they all have one thing in common: disruptive companies are constantly on the move and try to spot new innovation opportunities that will secure the long-term success of the company.

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Identifying Innovation Opportunities – How and Where to Start?

Instead of feeling powerless or even threatened by the current developments, companies have to go out and search for their own disruptive innovation power. This power can be found within so-called opportunity spaces – a space that offers potential and can be seen as an innovation field or overarching area. Within the innovation process, it defines a company’s “Where to play?” and starts much earlier than the ideation process. For this purpose, an integrated innovation management approach is more comprehensive than the conventional stage-gate process. It defines a business domain in which future growth is possible or even necessary. When searching for new opportunities for innovation, it basically means being able to simultaneously create ideas as part of the innovation management on the one hand and to foresee markets and potentials, called corporate foresight, on the other hand. The goal should be to create a constant stream of ready-to-market innovations that are always aligned with future developments and thus a source for disruption. Corporate foresight does not assert a claim of predicting the future but rather of finding markets that do not exist yet but hold a big potential.

The 5 Thematic Areas of Foresight & Strategy for Spotting Innovation Opportunities
The heart of innovation lies in environmental scanning to spot new markets or reveal unmet customer needs in existing markets, even if that means transforming the existing market. When defining new opportunity spaces, innovation managers should therefore always consider and evaluate the innovation and disruption potential, the addressed target group, the relevance for the defined target market, and the related trends and technologies.

A Company’s Inside and Outside World

Opportunity spaces, therefore, are always two-sided: They require self-reflection and a clear knowledge of the outside world of a company. What are the driving forces of change? In which direction are megatrends and consumer trends moving? However, what really matters is revealing the unmet customer needs and demands behind those trends, e.g. the rising robotic industry, which is considered an industry of the future and is pushed mainly by demographic change, a development faced by many industrialized countries. Besides these general developments and continuities, it is especially important to gain a deep technological understanding – which patents do already exist, which rooms of convergence can be observed; and finally, which weak signals can be found?

The other side of the opportunity space is shaped by the internal potential of a company, i.e. the innovation culture, the departments’ and employees’ knowledge, and information about previous failures or learnings. Those findings create the basis for innovation theories, e.g. radical innovation within niches as part of the evolutionary economics theory (Geels, 2002), a blue ocean as described in the “Blue Ocean Strategy” (Kim & Mauborgne, 2005) or a “White Space” (Jackson, 2011) within the company. They all more or less describe a field or way of how to spot opportunities for disruptive innovations.

The Role of Big Data and Data Mining

How do you break it all down to a practical level? It needs a handful of intrapreneurs, experts, and industry insiders – an innovation community that combines the findings of those two worlds, internal and external perspectives, and reveals probable gaps or potential opportunity spots. Yes, this is a mammoth task that can only be mastered by a proactive, practice-oriented, creative, and motivated team.

We live in a world where big data has become ubiquitous and a constant companion. Especially in the area of technology monitoring and technology management, a large amount of quantified data must be analyzed – a task that can no longer be performed purely by a human team. A software-supported data mining tool that uses visualization analysis and automated scanning processes to show interrelations helps to find relevant signals for opportunity spaces. Discovering and designing an innovation field requires a mixture of data research and intuition. While the innovation team then only has to concentrate on the evaluation effort, a tool can help to design the “where to play” and thus prepare the ground for innovative strength.

Free Download: Identifying Innovation Opportunities for your Business