Adaptive innovation focuses on building and releasing new products in high levels of uncertainty, and optimizing resources as you go. Not just up front at the planning stage. Studies of high growth Inc 500 startups have confirmed that firms adapting to market needs achieve growth more frequently, compared to companies sticking to an original vision and plan. Established companies looking to innovate, would be wise to allow for such flexibility as they expand their product portfolio. Corporate innovation shares the same market context with startups when launching new products.
Diving deeper into why high growth startups were successful will help increase the chances of succeeding as innovators. In contrast to startups, larger firms have access to much greater resources, although they struggle with the complexity this causes. Moreover, their starting point is often one of being cost efficient. This can lead to challenges in the early stage. Evolving products requires multiple rounds of financing, in order to minimize risk rather than using traditional budgeting to help new products succeed.
The following observations are based on my innovation experience in a B2B software context. While this is a very particular type of environment, with high technology and quality constraints but no manufacturing costs, the principles can be cross-pollinated into other environments. Also it’s worth noting that software has the ability to be packaged as products (MS Office) or as services (Google Suite). In short, the model and its insights can be applied to other types of new product development.