Structural InnovationStructural innovation focuses on creatively looking at the company’s capabilities, resources, relationships, assets, knowledge, and the industry structure required to deliver a better customer outcome. It involves actively looking at changing how something is delivered to produce a better customer outcome.
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There are two types of structural innovation. The first looks at innovating the internal structure of the firm, the capabilities it optimizes to achieve the intended outcome. Company capabilities are those things the company needs to do well, including the right skills, technology, processes, assets, and know-how.
The second type of structural innovation looks at how the organization aligns itself with the external structure of the industry and the norms of how things are done. External structural innovation involves challenging the standard assumptions that frame an industry, including who designs, develops, and produces the solution, the value creation activities, the way value is exchanged, suppliers, distribution, implicit and explicit market rules, and even the definition of the product or service. Both types of structural innovation require de-anchoring from industry norms and practices. Structural innovation is essential to changing customer outcomes and altering the competitive dynamics of the market. It enables creating new advantages and overcoming incumbent strengths and barriers to entry. It often helps transformative companies leverage the rigid structure of existing markets to their advantage. |
Explore this and other topics in the upcoming book Transformative.
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