By: Paul Van Zandt

Creating an innovation strategy means improving what you currently offer and finding ways to differentiate from your competition in the future. This is easy in principle, but applying this practice to your business can be very difficult.

How should you balance market standards and differentiation? How do you map out these features to make sure you cover every necessary area? The Innovation Ambition Matrix is the perfect template to help create your innovation roadmap. This article will outline the Innovation Ambition Matrix and discuss why it’s so helpful for innovative strategic planning.

Ambition Matrix Definition

The Innovation Ambition Matrix is a template that helps businesses differentiate between ideas that are part of their core offering or are an innovative expansion. Doing this allows teams to strategically plan how they will improve and expand their business without losing their brand positioning.

This template was popularized by an article written in the Harvard Business Review by Bansi Nagji and Geoff Tuff. They looked into the data behind innovation strategy and used this template to visualize the importance of the different channels of innovation and growth.

Innovation Ambition Matrix

Ambition Matrix Template

The Innovation Ambition Matrix focuses on three different categories to define ideas or innovations. These categories are “core,” “adjacent,” and “transformational.” On each axis, there are three touchpoints: existing, emerging, and new. These refer to the relative acceptance or implementation compared to the competitive market. On each axis, these variables refer to “where to play” on the Y (markets, customers) and “how to win” on the X (products, assets).

Core Innovations

The first layer, labeled “Core,” describes small-scale innovation focusing mainly on improving the existing product/service without venturing into unexplored territory. This doesn’t mean copying everything from the competition but mostly looks into optimizing current offerings and adding some market standard features. Some options here (for a product) could be design changes, online layout, or simple features.

Adjacent Innovations

The middle sector is labeled “adjacent” and encompasses areas that might be more of a stretch. While these innovations might require extra leg work, they usually build on some existing product/service and can sometimes be found elsewhere. These innovations aren’t necessarily brand new but will undoubtedly be new to your business. Given the variables on the X and Y axes, these innovations will either relate the existing product to a new customer base or a new product to the existing customer base.

Transformational Innovations

The final section is titled “transformational.” These innovations are aptly named as they’re transformative to your business or the market at large. These should be things that aren’t seen elsewhere in the market and are brand new to your business. When done correctly, these innovations can surface an entirely new market for your business to expand into.

What’s the Correct Balance?

Once you understand how the Innovation Ambition Matrix works, the next step is learning how to apply it. What is the optimal balance between each section for your business?

As demonstrated in the HBR article, the best practice to follow is a 70-20-10 split. This means 70% of your effort and ideas are guided towards core innovation, 20% towards adjacent innovation, and 10% towards transformational innovation.

This balance has been shown to outperform other models of innovative balance, and it helps keep everyone aligned toward your greater goals. By ensuring that there will be a given amount of time and effort dedicated to transformational innovation, you can improve your core offering without the team feeling like they’re neglecting real, impactful innovation. You know that’s part of the plan, and you can dedicate specific sprints to pursuing transformative ideas. This helps keep the whole team aligned and bought into the business’ values.

For different sectors, there might be a different balance required. For example, a business building grocery stores might focus even more on core innovation and less on transformational innovation because of how cemented their product is with the public. Depending on your business, this balance will be unique to you, but the best place to start is from the benchmark 70-20-10 split.

Why Use the Ambition Matrix?

The Innovation Ambition Matrix is extremely helpful when curating an innovation plan but also provides an intuitive vessel for communicating this plan internally and externally. Explaining the breakdown of future innovation can be super complicated unless presented in a way that allows people to grasp it and connect with the message. The Innovation Ambition Matrix will enable you to effectively visualize your plan and present it to anyone, fueling increased visual collaboration and integrating new perspectives into your workflow. Besides helping organize an innovation strategy, it is conducive to fueling collaboration and creating meaningful conversations around your business.

Conclusion

The Innovation Ambition Matrix is a template that is extremely helpful for organizing and creating your business’s strategic innovation plan. It helps align multiple teams to the same overall goal and ensures that your business has the perfect balance of new and existing features in the future.

About the Author

Paul Van Zandt is the founder of Fresco, a startup enabling real-time collaboration for people everywhere. Fresco allows you to collaborate with your team on an incredibly simple interface customize your workspace, and save all of your changes online in digital permanence. If you liked this article, make sure you check out Fresco to see how you can begin utilizing a futuristic brainstorming method.

Featured image by Kvalifik on Unsplash