Unlike ideation, which is fun, creative, and free of constraints, scaling is rife with obstacles and other challenges. It requires grit, dealing with ambiguity, and constant adaptation.
Scaling Box 3 ideas is difficult even if companies can see potential disruptions. But it is absolutely essential. Ideas, even great ones, can only get you so far. You need to execute.
Consider the equation for performance in Box 3:
Breakthrough innovation performance
= breakthrough ideas × breakthrough execution.
When we ask companies where they would rate themselves on breakthrough ideas on a scale of 1 (low) to 10 (high), they usually rate themselves as a 6. When we ask them where they rate themselves on execution using the same scale, the companies typically rate themselves as a 3. Thus, on average,
Performance = 6 × 3 = 18 units.
When trying to improve innovation performance, companies find it easiest to go back to the drawing board and brainstorm better ideas. They might be able to ramp up their ideas to an 8. In this case,
Performance = 8 × 3 = 24 units.
Instead, if companies could raise their game on execution by just 2 units, the results would be more significant:
Performance = 6 × 5 = 30 units.
Box 3 execution is difficult because it’s different from Box 1 execution. The Box 1 performance engine is great at creating linear innovations. For a car manufacturer, for example, the talent, processes, and systems help it design engines and create new models each year. However, this dominant logic can be a significant liability when it comes to nonlinear innovations—say, creating mobility as a service à la Uber.
To scale Box 3 innovations, you’ll need new talent, processes, and systems while also preserving Box 1’s dominant logic. You’ll have to consciously focus on overcoming three challenges, which we’ll cover in detail.
Forget: The forget challenge is all about Box 2—selectively forgetting the past. Given how Box 3 execution differs from Box 1 execution, such ingredients as processes, methodologies, measurement metrics, and business-model assumptions that are still relevant drivers for Box 1’s future growth must be forgotten by the Box 3 team. Instead, the team needs to overcome organizational inertia and develop a new culture and DNA to execute the Box 3 innovation.
Borrow: The borrow challenge is about which Box 1 assets Box 3 should borrow for its success. One common reason for failure in scaling Box 3 projects is a lack of partnership between Box 1 and Box 3 teams. Conflicts arise because the two teams have different jobs to do. Tensions, when ignored, quickly turn into hostilities, which, if not resolved, further degrade to outright warfare.
Learn: To scale up and deliver profits back to the company, the Box 3 project has to master a long and uncertain road, given that every innovation project is inherently risky. The learn challenge is to convert assumptions into knowledge efficiently, without spending excessive resources, and course-correct along the way. “Learning first, profits second” is the mantra that the organization must adopt. This approach requires a new mind-set from the Box 3 team as well as the leaders evaluating the team.