Revisiting "The Third Way".....Don't Skip the Important Decision 1
Posted by Joe Antle on February 20, 2021 2:45 PM EST
In the fourth quarter 0f 2018 we continued our focus of exploring classic theories of innovation and how they might be applicable....
...to the many aspects of giving people hope and enabling healthier lives, more successful careers, more prosperous financial well-being and happier relationships with people and our communities.
We began that series of blog posts by describing our thinking around the classic theories of disruption based on the research and writings of Dr. Clayton Christensen. He wrote about the two forms of innovations that his research determined were the most prevalents models of innovation. The less invasive and risky (and less disruptive) form of innovation for individuals and organizations to pursue was called "sustained innovations". These sustain the existing enterprise and often orders of magnitude improvements in quality, results, profits and competitive advantage in existing markets. Some common types of sustained innovations may be inventive new pricing models, leveraging new distribution channels such as the Internet, applying new promotional tools and product enhancements or extensions. Some people think or re-engineering as a form or sustained innovation and they may claim that off-shoring production, creating non-traditional strategic partnerships and entering new markets with products and service enhancements as examples of "sustained innovation".
Dr. Christensen's innovation research and writing really awakened many to the concept of "disruptive innovation". The theory of disurptive innovation often is built on the foundation of discovering why incumbent organizatioins which have had strong success for many years often do not see the next big thing or perhaps see the next big thing and choose not to pursue it. The disruptions often appear at first to be unattractive to the trained eye of experts who have enjoyed prolonged success with specific business models, pricing, technology and other aspects of their enterprise. Often the managers are rewarded for hitting growth targets and not ecouraged to make mistakes and waste resources and momentum. However. in the end, these disruptions begin their life by attracting new consumption. In fact. many successful disruptive innovations focus on solutions that are "good enough" for adoption by non-consumers who do not find adequate options that are convenient, affordable, simple or easily accessible.
In addition to Dr. Christensen's research and theories of innovation, have been a few others. In the meantime, Dr. Christensen's theories have evolved, and now the "disruptive innovation' aspect of his theories have sometimes become relabeled as "market-creating innovation" or "jobs to be done". Other innovation researchers and writers espouse concepts such as "blue ocean strategies" and "open innovation". These being ways to aim at market segments and to leverage unusual models and processes for developing and deploying breakthrough solutions.
Toward the end of our series of blogs that can be found throughout the latter part of the year 2018 on this HealthETeams Group platform/blog hub, we discussed the value of "The Third Way" which described an innovation approach written about by David Robertson and Kent Linebeck. We discovered some of their wisdom in writings in the Harvard Business Review and in an interesting book published by Havard Business Review Press called "The Power of Little Ideas" that was published in 2017. While this book and this theory may not be as widely known and its practice may not be as widely understood, we felt at the time and still do today that "the third way" , provides an answer for currently successful companies with key products and services that they want to extend growth of and not experience the sometimes severe downside of failed efforts at disruptive innovation or the success of sustained innovations which are not significant enough to sustain the current business model or even provide organizational success of sufficient scale and magnitude to enable continued success in the face of new competition, changing technology, laws and regulations or consumer preference changes.
We are both proud and embarrassed about our blog series on The Third Way which were published on this blog hub in the fall of 2018. Our pride is in knowing that the application of The Third Way may help organizations to succeed with innovation and that it fills in the middle space between the sustained innovations and disruptive innovations. Our embarrassment is that when we published the series on the four key decisions that organizations and leaders much make to effectively leverage The Third Way, we simply overlooked publishing the first and perhaps most important decision-Decision 1. Decision 1 is based on answering the question, "What is Your Key Product (or Services)?". This fundamental decision is self-evident, but is often harder for many organizations which have multiple products and/or service lines to get right.
Perhaps another way to think of why the decision one is so important is to understand the context of The Third Way as being a very distinctive approach with three key elements which the four decisions are tied to. These three fundamental elements of The Third Way (TTW)" are:
1. TTW creates a family of complementary innovatioins around an existing (or perhaps new) product or service, all of which work together to make that product or service more appealing, competitive or profitable.
2. TTW shows that these complementary innovatioins form a system designed to carry out a single strategy or "strategic promise".
3. TTW is differentiated by the fact that unlike disrputiive or radical innovatioin, innovating around a key product (or service) does not change that product in any significant way.
So, given the three things that are foundational to The Third Way model, the first decision (Decision 1) is to define and gain organizational support on the first key decision by answering "What is Your Key Product (or Service)? From there the work of answering the other three decisions among the four key decisions begins and expands. For additional information and our blogs for the other three decisions, please go to our Blog Posts that were published throughout the months of September through December 2018.
Finally, I close by saying we regret we didn't publish the Decision 1 blog on the The Third Way during the latter part of our innovation series which were published throughout 2018. However, perhaps this is somewhat symbolic in that it proves the flexibility of The Third Way, which is to say that organizations may still be successful adopting this innovation model even if they don't decree Decision one then the answers to the other three decisions which you will find described in our fourth quarter blog posts in 2018.
And like all innovations the well-worn phase of "Better Late than Never" holds true as well.