Is Innovation Risky?

A common perception is that innovation is risky.  The bolder the innovation the greater the risk.  Ask 100 people whether the previous statement is true and most would agree.  But is that really true?  I’m going to argue no.

Behaviour Space

To make that argument I’m going to suggest, that at its core, all innovation is about the creation of behaviour space. Perhaps it’s an internally focused innovation, like the value disruption project I’m currently blogging about where they want a new system to collaborate.  Or it’s an external innovation like the iPad.  But in all cases it’s about creating new behaviour space.  And, if you understand behaviour space you can reduce your risk.

What exactly is Behaviour Space?

Here’s what I mean by behaviour space. Take pens and pencils for example.

Imagine for a moment that pencils had never been invented and all we had to write with was pens.  Everything was written in ink.  Now, imagine introducing pencils to that situation.

Once the pencil becomes available you can perform (behave) new tasks you couldn’t do before.  Tasks such as writing upside down, erasing, writing on surfaces you previously could not because the ink would blot.  You see, the advent of pencils allows you to perform new behaviors.

Note though, that the pencil itself is useless until you use it.  It’s the behaviour that the pencil enables that provides us value, not the pencil.  In reality, the innovation is not the pencil.  The innovation is the new behaviour space.  The pencil is simply the disruptor that enables the behavior to emerge.  It’s role is to disrupt how we normally do things to allow new behaviours to emerge.

Granted the size of the behaviour space is limited, especially if we compare it to something like the iPad.  Which leads us to our second conclusion; the value of an innovation is the size of the new behaviour space it enables times the size of the population that desires that new behavior space.

The same holds true for internal innovation like the collaboration example above.  Why does a company look to acquire new technology (to collaborate)?  Simple.  They are looking for their people to behave differently: to perform new collaborative and communication  tasks that they are not able to do.  Technology, new business models, new services, by themselves are useless.  It’s the behaviour that they enable that creates the value.

Why Understanding Behavior Space Reduces Risk

So, how exactly does understanding behaviour space help us reduce risk?  There are lots of ways.  In this blog post I’m going to talk about just one – Assessing potential innovation success.  In subsequent posts I’ll explore other ways understanding behaviour space reduces risk.

Measuring Innovation Success

One of the challenges in innovation is deciding which idea has the better potential (e.g.  market potential or productivity potential).

Does idea #1 have the best potential or idea #2.  Into which one should we invest scare resources in exploring?

Here’s how understanding behaviour space reduces risk.

Upon grasping the concept of behaviour space you are quickly able to compare the value potential of  one idea to another.

Try this test.

Take a few moments and think about the behaviour space the Kindle provides as a B/W screen to download books and magazines.   Jot down all the times and places you’d want to do that (Use the pencil we talked about).  Okay, finished ?

Now compare that to the potential behaviour space of the colour iPad connected to the iTunes stores and 10s of thousands of app developers.   Jot down all the behaviors the iPad could bring to fruition, along with the times and places you’d want to do that.  Okay, finished?  (BTW You can find additional ideas here.)

After 5 seconds of behaviour space analysis it becomes self-evident that the behavior space potential for the iPad far surpasses that of Kindle.  That’s why I predicted in this post that the iPad will soar where the Kindle did not.  Just in as I’m writing this post; in this article they talk about how Barnes and Noble are adding an app to the iPad to download books.  Already, the size of the iPad behaviour space footprint is growing.

What does this analysis mean to you?

Well, when you compare two ideas competing for resources on their ability to create behavioral space you start to measure which has the greater potential.  In addition, behaviour space analysis allows you to tweak the design of your product or service to enlarge its behavior space footprint.   So your ideas have better value potential before you spend precious resources in implementing them.

Summary of how behaviour space reduces risk

1. Innovation is the creation of new behaviour space.
2. The product or service is simply the disruptor that enables new behaviour space to emerge.
3. The size of the behavior space footprint represents the size of the potential value your are offering.
4. The greater your value potential the greater your monetization potential.
5. Using behaviour space to analyze innovation ideas lets you compare two competing ideas for their value potential.
6. Also, using behaviour space analysis lets you tweak ideas to enlarge their behavior space footprint and hence their value potential.

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