Developing new products and services in today's economy requires a process of adaptive innovation—in other words, the ability to adjust to the fast-changing needs of target markets. For that reason, it begins at the edge of the business, with the people closest to the customer—or with anyone else receiving value from the company.
Customers are important recipients of value, yes, but by no means are they the only audience worthy of attention. Employees, value-chain partners, investors, the media... all will experience value flowing from your organization and will need to be invited to collaborate in creating that value.
To adapt to a dynamic market's demands, your company needs relationship-centricity embedded into its very DNA. Strategic relationships, both internal and external, constitute the asset that drives adaptive innovation.
Adaptive innovation is never fixed in a point in time; it is never "one and done." It is ongoing, creating new norms through creative disruption of the status quo... because if you don't disrupt yourself, someone else will. I have seen in my consulting work with clients that disruption often comes from an unknown or an underestimated competitor. Marriott is not going to get disrupted by Hyatt; it gets disrupted by three college dropouts who rent out an air mattress in their apartment. Now look at the market capitalization of Airbnb.
There are three fundamental steps necessary to support this process of co-creating value via adaptive innovation.
1. Listen louder
Expand your organization's environmental scanning capacity to find—and your ability to prioritize—relevant information in guiding strategic planning, innovation, and marketing.
Some might think I'm using "listening louder" as a synonym for environmental scanning, market intelligence, or market sensing. That's not the case; none of those have a pulse! While they are all activities that produce information needed to drive strategic planning, and each feeds the process of listening louder, they do not emphasize the active role of the entities to whom you are listening.