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One of Innosight's core principle is that while many companies have no shortage of innovative ideas, they face challenges bringing them to market in large part because predicting the ideal market for a truly novel idea is no easy task. The ideal approach we advocate is typically an emergent strategy, a process that allows flexibility and rapid learning around finding the right market without exhausting a company’s resources. Since final markets for disruptive innovations are so difficult to predict in advance, a capacity for emergent strategy is critical for repeatable success in innovation.

This is particularly the case in disruptive innovation because no technology is guaranteed to be disruptive — the business model and roll-out strategy are equally important in determining if a disruptive phenomenon will take root. Accordingly, a mindset of emergent strategy allows the flexibility in positioning and marketing decisions that are critical to overall success.

This idea is a familiar one to entrepreneurs, and it’s well-known that successful start-ups typically go through many iterations. But this mindset can be more difficult for large, established companies. However, there are companies, even 100-year-old ones, who have fostered the culture and processes that promote an emergent strategy approach. Case in point: Hitachi Senior Chief Researcher Kazuo Yano recently shared with me one example, finger-vein authentication technology (similar to digital fingerprint scanning) (link in Japanese). Initially, Hitachi’s plan was to market the product for building entry control, but it was discovered later that the ideal market was actually for use in ATMs. Dr. Yano explained that this latter market was not originally evident, but that the company was able to reorient itself and react to changing realizations about the market.

The insight and ability to course-correct is extremely valuable for most companies, but even more so for firms like Hitachi that put enormous value on being innovative leaders (consider their slogan “ Inspire the Next” and their sponsorship of the MIT Media Lab).  Hitachi will have many upcoming opportunities to flex its emergent strategy skills on products coming right out of the pipeline, such as their new Business Microscope/Sensor Badge (link in Japanese), which is a device to measure behavior and productivity within a business or other organization. The winning applications and business model for this emerging technology have yet to be pinned down, but it’s a safe bet that they will be well-served by a similar emergent strategy. It’ll be a very interesting technology to watch.

Back in May at the Front End of Innovation conference, Innosight president Scott Anthony interviewed Procter & Gamble CEO A.G. Lafley in a keynote presentation. We ran a print excerpt from that presentation in our July-August issue, and Forbes.com picked it up as well. The interview was reprised recently in a new video that has just been posted on the P&G website as part of their 2008 annual report (the video link is toward the bottom of the left-hand nav bar). In the wide-ranging interview Lafley discusses the management of innovation, customer-focused innovation, innovation portfolios, disruptive business models, growth, and how to lead for game-changing innovation. It's well worth watching.

The “most exciting phone in the history of phones” was just released on Tuesday, September 23. The HTC G1 will be available through T-Mobile in October, and it will wield Google’s relentlessly hyped Android operating system. So is this the next “Jesus Phone”? I think that while the phone may be successful, it’s nothing groundbreaking. The operating system at its core, however, has the potential to lead to truly trailblazing advances in mobile computing.

I recently argued in this space that Google’s new Chrome Internet browser doesn’t pose much of a threat to Microsoft’s Internet Explorer on its own, but that when Chrome is viewed as a small piece of Google’s larger strategy to make it easier for us to do more of our computing jobs online in the “cloud,” the disruptive possibilities begin to take shape.  I see Android as something very similar: a product that, in its current incarnation, may not do much to the dominant incumbents, but has the potential to function as part of a broader disruptive strategy.

The G1 phone is not yet available to consumers, so hard facts about the Android’s quality are difficult to come by. That said, Android does not appear to be superior to the iPhone or significantly better than other incumbents and may need to fill in a number of gaps in its features (for example, it offers connectivity to Amazon’s MP3 store but unbelievably lacks a headphone jack).

The G1 enters an extremely crowded, competitive, and continually evolving market. I have no doubt that Google’s ability to deliver high-quality software will enable it to improve Android and add to its features, but right now Android is not a game-changer, and it does not offer any especially compelling or novel sustaining innovations in the mobile phone/Internet device space.

Nevertheless, I think Android is an exciting new development. As a mobile operating system (an open source one that allows software and hardware developers access to its innards), Android may very well find its way into the broader mobile computing space. If that happens, Android may (finally!) bring some standardization to the rapidly growing variety of devices that connect to the Internet, including set-top boxes and potentially cars, computers in televisions, and other products (as this blog post explains).

If Android appears in other devices it could target Internet nonconsumption. Many devices that could be usefully connected to the Internet aren’t yet (or are, but have mediocre operating systems and/or very limited functionality), so there could be a great disruptive opportunity for Google to make Android available in them.

Of course, one might reasonably wonder how Google plans to generate revenue from Android, since it’s being given away and is open source. I would imagine that, given Google’s dominance of search and the plethora of advertising revenue-generating applications it offers, the more people it can connect to the Internet more of the time, the happier (and more profitable) it will be.

When a company talks about trading off pure performance in the name of lower prices, disruptive alarm bells start ringing. After all, companies like Dell Computer, Southwest Airlines, Wal-Mart, Charles Schwab, and Nucor have prospered by following this kind of low-cost disruptive strategy.

A startup company called LifeSize Communications hopes to be next on the list. As described in a recent BusinessWeek article, the company offers reasonably high-quality videoconferencing over the Internet at prices that are sharply below emerging market leaders Cisco Systems and Hewlett-Packard. LifeSize's solutions range from $5,000 to $40,000, compared to as much as $300,000 for Cisco's solutions.

It's reasonable to predict that we'll see an increasing number of similar low-cost strategies as economic woes continue and start-up companies seek to find the opportunity in economic turmoil. Therefore, it's natural to ask: How can you tell if a low-cost disruptor is going to succeed?

Our analysis of companies that have successfully and unsuccessfully followed low-cost disruptive strategies suggest that for LifeSize to succeed, it must be able to answer yes to three key questions: ...

Read the rest at Scott's Harvard Management blog, Innovation Insights.

Greg Daines from Ideanomics, who participated in last week's Post2Post Virtual Book Tour for The Innovator's Guide to Growth, has posted a three-part video interview with one of the book's authors, Mark Johnson. You can see the interview at these links:

Part One — Why the book was written and who it's for

Part Two — What is essential to disruptive innovation projects

Part Three — What are the most common misconceptions about disruptive innovation