Jul 15, 2010

Reframing is the key to Disruptive Innovation

I have always considered the ability to see things in a new way as the critical aspect of innovation (changing mental models as Peter Senge has said) and this HBR article which looks at three leaders including Ratan Tata shares what are the three aspects of this skill - called "Reframing"

The article is titled How Reframers Unleash Innovation in Their Companies (And Beyond)
First, Reframers dare to question well-ingrained business truisms and industry paradigms. As they experiment with radically new business concepts, Reframers constantly ask themselves "why not?" For instance, Tata shattered the century-old car manufacturing paradigm: rather than completely producing the Nanos in its own factories, Tata Motors will distribute component kits that entrepreneurial small businesses can assemble close to customers. By questioning the conventional wisdom, creative leaders like Ratan Tata help their organizations navigate an increasingly complex business environment that places a premium on leaders with a flexible mindset.

Second, Reframers think not only with their minds but also with their hearts. After all, the heart of change begins with the change of heart; as Mahatma Gandhi eloquently put it: "Be the change you want to see in the world." As such, Reframers are erecting what we call a mental (and heart) barrier to entry for competitors. For example, you can bet that leaders at major food and beverage companies are busily hatching new business models to compete with PepsiCo's wellness strategy. But these rival business models won't be sustainable unless the leaders who developed them sincerely care about the wellness of consumers. In the dawning Web 2.0 world where authenticity is the new source of competitive advantage, a heartfelt business model transformation will be more readily accepted and handsomely rewarded by consumers than a disingenuous me-too competitive offering.

Third, Reframers catalyze massive social innovation. To borrow from chaos theory, the change in the minds and hearts of Reframers is akin to the butterfly flapping its wings over Hong Kong that can unleash a tornado in Texas. Even a minor reframing can yield a disruptive business model that can revolutionize not only an industry but entire societies — a massive chain reaction captured in the following formula:

Mental model innovation → business model innovation → industry innovation → social innovation

The key to business in this century would be creating social innovation - and the focus on sustainability.

What do you think?