The Innovator’s

Playground
How strategic imagination and relentless curiosity
create an opportunity economy

Sense Perspective
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Opportunity ahead

Today, now,
this very moment,
is the slowest pace
of change you will
experience in the rest
of your life.
Uttered by technology pundits with growing frequency, this
phrase is becoming quite real. Reading the headlines, it’s
clear an unsettlingly different world is emerging. Amazon is
working on a version of its Alexa assistant that can understand
emotions. A machine is predicted to join a corporate board of
directors within 10 years. Gymnasts in the next Olympics could
be judged not by people but by robots that instantaneously
scan, plot and analyze the arc of the athlete. Children born
today will very probably not learn to drive, nor visit a physician
for a checkup when they are 20.

Introduction
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A
n acceleration is surely upon us. In 3D printing create decentralized and fragmented
10 years, 7 billion people will be production, making many traditional factories
seamlessly connected to each other obsolete. Virtually no traditional business will be
and the entire knowledge of humanity. spared by exponentially accelerating change.
The concept of “going online” will cease to
exist, as we’ll be permanently and invisibly But there’s another lens — a wholly optimistic
connected to an internet that is an enveloping one. Just as there has never been this degree
and ever-present fabric in our lives. Our bodies of change, there has never been this degree
will become our passwords, with biometric of possibility for innovation with tremendous
recognition “announcing” our entrance to many opportunities for new solutions. Drones may raise
environments. We’ll be surrounded by a cloud of vexing questions about privacy and the sanctity
data that can know our every preference, habit of personal spaces, but they can deliver a life
and behavior, and that tracks and scores aspects jacket to a drowning beachgoer or flood victim in
of our daily lives. Distributed ledger software, or a fraction of the time it might take for a lifeguard
blockchain, will enable trusted transactions or to respond. If we allow insurers and automakers
contracts without any intermediary. Virtual and to access data about our every acceleration,
augmented reality will enable digital experiences turn and tap of the brakes on the road, we’ll see
that the brain can’t distinguish from real ones, for a more transparent, efficiently priced market for
the price of an iPhone. Genomics, biosensing and auto insurance and fewer traffic fatalities. Thanks
bioinformatics will yield near-perfect information to blockchain applications, the goods we own
about our health. Looking beyond the typical will manage themselves to our budgets and
three- to five-year planning horizon, the world preferences, ordering their own upgrades and
starts to look very different. repairs in advance. And just imagine when we
can predict our future well-being, monitoring and
intervening to improve it by the minute. In the
There are two ways to view this words of technology guru and WIRED founder
impending change. Kevin Kelly, there has never been a better time to
From one lens, it’s time to play defense. start a business.
Automation is expected to rapidly erode job
security for entire categories of workers, take But what will it take to win customers in this new
nearly 50 percent of jobs and wreak havoc on world of extreme connectivity and automation?
value chains. Retail businesses will see their A deep understanding of digital business design
physical models disrupted by even greater and how it’s fundamentally shifting how we live
seismic shifts of digital and virtual technologies, our lives, no doubt. But also a new mentality
completely changing what it means to shop. of relentless curiosity and boldness, even for
Increasing transparency will melt away the large corporations, in seizing the opportunity
ties that bind together vertically integrated for innovation. For the only viable response is
businesses. Scale-driven manufacturers will see to embrace a more expansive, ambitious sense

Search

Introduction
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Affective
computing

of purpose; to commit with deep passion and Drones

profound optimism to solving the next big,
unrecognized and unmet need. Traditional
management constructs and tenets about value Natural
creation based on “core competencies” will need language
to give way to entirely different organizational
approaches, skills and cultures animated by
strategic imagination — a way of thinking and Micro data
leading that effectively channels the entire centers
energy of an organization into keeping pace with Smart robots
consumers’ ready embrace and absorption of the
new and disruptive.

Leaders will need to shift their perspective Bioprinting

Biochips
and understand that the fundamental, in
fact only role, of every business is not as a
process to be managed, or a product to be Autonomous
vehicle
produced, but rather as a ceaseless problem-
solving machine. Genomics Lifi

Machine
Advanced learning Biometrics
analytics
5G
3D printing
3G/4G
Social Fully IoT
technologies ubiquitous Wearables
internet
Ubiquitous
sensor
networks
Smart
phones Speech-to- VR/AR Blockchain
GPS Storage & speech IoT
cloud

THE BIG IMPACTS THE BIG IMPACTS

IN THE LAST FIFTEEN YEARS IN THE NEXT FIFTEEN YEARS

Introduction
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An unstoppable shift to
a very different world

Every aspect of life is becoming dominantly The shift is inescapable. Over time, every
digital, at an accelerated pace. Yes we have aspect of our world will become more tracked,
felt the changes with our media, our music, transparent, automated, unbundled, intelligent
our communications. But they are much more and fluid. No regulation, industry structure, or
widespread. The value in the product and services unique asset or skill will hold back accelerating
you buy is surrounded with essential ratings and change. Kevin Kelly’s recent book about
data that drive your choice. The value of the GE jet technological forces is called “The Inevitable” for
engine, Caterpillar tractor or Tesla car lies partly in good reason.
steel, but largely in bits and bytes. The waiter for
the restaurant becomes the Seamless application. What does this mean for our lives on a daily basis?
The branch visit will get replaced by the Skype The six fundamental shifts below and on the next
call; the retail store visit often by the virtual page offer a picture of the world for which we
reality session. The pharmaceutical pill has a mini need to prepare and the attendant opportunities.
sensor to report if it was absorbed. And when Although enabled by a growing array of new
each product or service becomes largely digital, technologies, the changes will be fueled by
they now can be changed instantly, customized human behavior: our unquenchable thirst for
perfectly, remembered forever, produced a more instantaneous, open, connected and
ubiquitously and connected seamlessly — they intelligent world.
come alive with potential.

1
A life in flow
2
Transparent existence
3
Omnipotent individual

New models of work, sharing platforms Data will explode, as everything and As products become digital, they will
and the flexibility of constant connection everyone increasingly becomes tracked quickly move to platforms, becoming
will upend the traditional world of one job, and scored. The human desire for social, modular, customized and democratized.
one house and “my” things. Optionality shared experiences will further the Distributed ledger technology,
will become the new stability in a world push toward significant transparency, relying on the interconnection of
prioritizing access over ownership and merging public and private while far-flung computers instead of central
experiences over possessions. making the world more open, validated authorities to verify transactions, will
and quantified. further a democratization of trust and
decentralization of activity. Production
will become flexible and dispersed,
customized to the unique wants of
controlling, empowered consumers.
Customers will wield god-like power
over their lives, from their homes to their
genes, using it to customize, personalize
and cocreate. Consumption will become
an ongoing act of cocreation.

An unstoppable shift to a very different world

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4
On-demand world
5
Exponential intelligence
6
Synthetic reality

The software world is an immediate world, AI and connected objects will add The virtual and real will overlap,
and everything will get significantly faster. intelligence to everything — our expanding our perspectives and
We’ll reward the fastest solutions with our possessions, our daily routines and all opening up new possibilities in
dollars and our data. On-demand access our decisions. We’ll “know” more than identity, monetization, gamification,
and automated task completion will ever, with constant access to the world’s beautification, information and
serve our appetite for the instantaneous, knowledge base and smart digital communication. As the two realms come
fundamentally changing our time-spend assistants, shifting whom and how we to seem more indistinguishable, we’ll no
and expectations. We’ll have less to do trust and changing decision-making from longer speak of a “digital” versus “real”
and more to manage. Much of what we a personal deliberation to a collaborative identity. Navigating with ease between
do today will fade into the invisible. and connected feedback loop. Everything the two worlds will become another
we encounter will be enveloped with form of multitasking.
data and intelligence, from the products
we consume to the pills we take and the
services we buy.

As these shifts unfold, they’ll yield a bounty of The likes of Facebook and Instagram upended
new innovations and value propositions: platform who creates and controls media, and how profit
businesses that enable peer-to-peer production; is realized.
intelligent agent businesses that optimize and
guide a wealth of daily actions; innovative models Ten years from now, new technologies will bring
that trade very personal data for very unique about business design changes that are even
solutions; and whole new services that price and more profound. Blockchain won’t just make
sell trackable outcomes in health, finance and the transactions more reliable and efficient; it will
workplace, among other areas. enable peer-to-peer businesses that bypass
intermediaries and potentially make scale
Importantly, the big technology and customer economies a thing of the past for many activities.
shifts don’t just bring about a new or better The internet of things, or "IoT," won't just make
customer experience, they bring about a our products smart and connected, it will enable
fundamental change in business models. Fifteen a wealth of service businesses built to guarantee
years ago, the invention of sharing technology, outcomes. Companies need to think deeply and
content creation tools and bandwidth fast strategically about what these changes portend
enough to enable video and image sharing didn’t for the fundamental underpinnings of their
just make for a better rich media experience, it business designs.
changed what it meant to be a media company.

An unstoppable shift to a very different world

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Mind the gap

As individual consumers, we have shown our

ability to handle such exponential change. We
soak up new innovations at a staggeringly fast
pace. WeChat went from 0 to 1 billion users in
China in less than four years. Instagram went from
a photo-filtering technology to a communications
necessity for half a billion people in three years.
As consumers, we’ve been conditioned to
embrace and absorb the “new thing” at the touch
of a screen.

But while consumers can adopt change

exponentially, organizations tend to follow a
linear arch. It’s just plain hard to retool products,
rethink distribution and move and motivate tens
of thousands of individuals at the same pace as
consumers adapt to new innovations.
Pace of customer change
And so … the gap grows quickly. = exponential

Time for
a different
“how”

Pace of company
= linear

Mind the gap

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Strategic imagination

What does it take to close the gap? What skills luxury of watching markets develop and then
and strategies are required to get a step ahead? catching up. IBM was able to patiently watch
Lotus pioneer spreadsheet software, then
The extraordinary pace of customer change simply acquired the company in 1995 to fuel
demands a different model. It cannot be about a transition to a software and service provider.
“plans” in the traditional sense. You can’t pick “the But when it comes to digital models, once a
answer” like you used to. new platform is formed, it can quickly become
the dominant and seemingly unassailable
Most big companies base plans off cost data, standard à la Amazon, Uber, Facebook and
market sizes and share predictions. But the Google. Market caps balloon to the point where
markets of 10 years from now have yet to be the upstart standard-bearers are out of reach as
invented, let alone measured. The traditional acquisition targets for incumbents and would-be
three-year plan, the SWOT analysis and core competitors — PayPal is worth approximately
competencies don’t encompass what’s actually half the average value of the biggest American
coming. In fact, core competencies can get in banks.
the way. “How do we turn our thousands of
stores into an advantage?” may not be the right Solving such an unstructured problem is not the
thought process. province of typical left-brained business analysis.
It requires creativity and design thinking on a
Corporate strategists also no longer have the big scale, mobilizing diverse perspectives and
disciplines to invent new models. Waze solved
the traffic problem through crowdsourcing
real-time data from drivers. Tala is solving
THE QUESTIONS THAT MATTER lending to the unbanked in Africa with location
data and algorithms on cell phones that verify
How do I get a step ahead? creditworthiness.

Today, and for the foreseeable future, strategic

Do I have the radar to see imagination trumps strategic plans.
what is happening?
Strategic imagination means thinking more
Who is the customer of the future? deeply about the customer of the future, and
committing to an innovation agenda that solves
for unrecognized needs, and configuring
Do I have the organization, culture and culture and decision-making styles in new ways.
business model to follow them? Tomorrow the following disciplines will
be essential.

Strategic imagination
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Mind

Section title
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the gap

Section title
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1
Extraordinary sensing
When you are driving faster, you need much stronger headlights

There is no more important question to Suspending constraints in service of true

answer than “What is the big unstated need of insight. Ignore the usual product, risk and
tomorrow?” The answer is deep, constant and regulatory barriers. Cultivate a point of view from
insatiable inquiry. Does your executive team know the perspective of being outside the business
what blockchain is and how it’s being applied looking in, and then ask, “What might be?” This
experimentally? Does it know how Chinese mind-set challenges the “It can’t make money,”
consumers are responding to Alibaba’s latest or “It’s not legal” (Uber circumvents, and then
feature? What the impact of the AADHAR in India changes, the taxi medallion system)," or “It’s
has been on data and privacy and authentication? not safe” (Airbnb upends the trust equation in
Broadly scanning and deeply probing frontier hospitality).
technologies, frontier consumers and frontier
business models have never been more Most critically, extraordinary sensing is fueled by
important. a culture of intense, probing curiosity — perhaps
the single most important leadership attribute
There is no way to anticipate and manage today.
extraordinary change without an extraordinary
sensing capability. Extraordinary sensing frames The senior leaders of the Googles, Amazons and
and probes crucial questions, i.e., in the face of all Teslas live as sponges, filling their schedules by
of this change, who will the customer be? What learning, probing and encouraging. Their a priori
are the problems they don’t know they have? How assumption is that they’re ignorant, in a sense,
will they live their lives? How will they behave? and that each new day brings a daunting but
What will they need? What will they fear? This exhilarating learning curve.
means:
The executive mind-set at many big companies
Thinking further out. Elevate strategic can be quite different. Executives tend to
imagination over the tactical to push the be rewarded for being decisive rather than
conversation beyond immediate markets and exploratory. Their time is spent evaluating and
typical planning horizons. Google’s glasses, assessing, and they often assume they are
Oculus’s VR headsets and Amazon’s drones knowledgeable. They live as gavels — their role is
may seem fanciful until they quickly become to judge and conclude.
real. Augmented reality seems speculative
until Pokémon Go appears. The idea of trading Extraordinary sensing is more sponge than gavel.
personal private data via a smartphone for access It thrives in an environment where opinions,
to loans in the developing world seems outside ideation and crucial information are readily
the norm until Tala shows it works. solicited and shared. It’s what allows one’s
radar to see far enough to envision solutions to
Thinking diversely. Meld what’s possible with problems whose outlines are not yet in focus.
technology with what’s likely in human nature.
Bring data and behavioral scientists together for a Extraordinary sensing is the tool of the intensely
complete picture. curious, the fuel for the innovator.

Extraordinary sensing
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Extraordinary Sensing
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Expansive, Ambitious, Purpose

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2
Expansive, ambitious purpose
The size of the business will be proportional to the size of the problem you aim to solve

The size of the opportunity at hand demands a Ignores today’s how. The means by which value
more ambitious goal. As connected data, people is delivered will change and products will become
and objects liberate companies to pursue new irrelevant. The ambitious purpose that fosters
agendas, the right “guide” is not a traditional new solutions for customers says nothing about
corporate vision that defines “the business you how the job gets done (build a car or create a
are in” but rather an expansive purpose that ridesharing app? Tesla is doing both), and in fact
encompasses an ever-broadening set of unsolved it encourages a new way.
consumer problems. Caterpillar, for example, is
leveraging connected technology to transform Ignores the competition. An ambitious
from an equipment company to a solutions purpose pushes people to look ahead and not
provider accountable for the productivity of farms around. The stepped-up pace of change means
and mines. that the threat isn’t a competitor successfully
upgrading a product; it’s someone else winning
An ambitious purpose expands the nature of the customers’ attention for what matters.
problems you obsess about. As value-creation
possibilities proliferate, narrow self-definitions Makes the important work everyone’s
by industry excellence (the best rental car work. An ambitious purpose moves the “What
company, the best auto manufacturer, the best should we do?” decisions away from a small
bank) become limiting. Today’s high-value-add number of senior leaders, and it makes coming
service is invariably tomorrow’s commodity. The up with answers the daily work of everyone. It
convergence that Apple saw in becoming the democratizes invention, flattens organizations
camera, navigation system and communication and liberates every employee to search for the
system is coming to every industry. Witness next big solution.
how the processing and transaction capability
of a bank is already being subsumed into other The ambitious purpose is the guide to growth
functions — the shopping utility of Amazon, and the defense against irrelevance. It directs
the seamless booking of Uber or the sharing energies toward tomorrow’s problems as
of payments among friends via Venmo. An opposed to yesterday’s products.
ambitious purpose:

Lays out a goal that can never be completed.

The role of the ambitious purpose is not to
describe your company but to perpetually fuel
exploration and momentum toward the new value
space.

Expansive, ambitious purpose

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3
Digital business design
Digital businesses scale faster, but run by different rules (and all businesses are digital)

A digital business design is not the same as That the value is in services, and everything
“digitizing” a business, automating the supply will be a service. Digital tends toward service
chain, boosting CRM, improving app functionality, and subscription models, which are inherently
adding more social to the marketing mix. It smarter because they build in learning loops and
means fully embracing different assumptions, feedback, capture better data and keep iterating
even about how money is made. Digital business to improve quickly. People are Walmart “shoppers”
designs hold these truths to be self-evident: but Amazon Prime “members” — the result is a
highly different relationship and ability to grow.
That the value you create doesn’t need to Uber learns you, the yellow cab forgets you.
be created by you. A digital business design
recognizes that when everyone is viewed as a The winning business designs are based
producer in a connected system, exponentially on platforms, where advantage is in the
more value is created. Platform models, which orchestration of the whole, no longer the
coordinate networks of participants, scale faster efficiency of any one player. They pivot
and deliver greater value. Digital models have companies from producers to enablers, and
built-in incentives to collaborate into their models profit models from being producer-centric to
and are exceptionally easy to snap into. customer-centric. They also afford unexpectedly
new levels of creativity — the closed-loop
That transparency is a great thing, not a threat. business design of the Amazon Dash button
A digital business design seeks to profit from the trades loyalty and ongoing profit streams for the
fact that more data and more transparency are radical convenience of pressing a button
inevitable. The digital mind-set is to grow value for replenishment.
by adding data, not to hide value by bundling or
trying to be too controlling about information that Living by these rules, which buck conventional
can help customers make better decisions. wisdom, takes courage. Embrace complete
transparency, even if my product scores poorly?
That share of customer attention is the only The less you make, the better you do? Price for
lasting source of advantage. Digital business outcomes, not for products? To keep up and get
designs assume that winning attention means ahead, embracing these assumptions has to
winning the flow of data, which creates the means become the new normal.
to win even more attention. Scale economies
come from the database size, not the factory size.

Digital business design

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Digital Courage
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Experience Artistry
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4
Experience artistry
The little things matter a great deal

Our unbundled digital world of tomorrow is a becoming design artistry and craft, a realm of
plug-and-play world, a world of assembling the creative problem-solving where scrupulous
best answer. The best sensors, screens, speakers attention to detail matters and speed and
and cameras are equally available to the iPhone effortlessness can have magical results. Where
as the Samsung Galaxy, just as the best drivers are the passion for every pixel is the difference
to Lyft and Uber; the best restaurants to Seamless between winning and losing. And as such, it
and GrubHub; the best risk-management requires intimate insight into the subtlest
algorithms to Allstate and Progressive. Most emotions and behavioral quirks of the user,
pieces are available to most players. rooted in deep human observation.

Consequently, it’s the meticulous design of the Importantly, customer experience is now the
whole and inventive assembly of the pieces that province of design thinkers and not the operations
create the value. The effortless, ergonomically or service teams. Experience artistry is the new
delightful, sensual experience that fits in our standard, entailing:
lives in a new and unanticipated way will earn
our dollars. SONOS, Nest and Echo aren’t just Effortless ergonomics. In an age demanding
the best “products”; they’re the best experiences. extreme immediacy, the difference between
They integrate, simplify and anticipate. The sales one and two clicks (or no clicks at all) can be the
call that knew your need the moment it happened, difference between winning and losing.
the waived fee just when you needed a line of
credit — how everything falls seamlessly into Unique signature moments. Moments should
place is what matters. do more than create special experiences, they
should be designed to differentiate brands and
If there is anything we have learned from our shift companies in new and unexpected ways.
into the digital world, it is that seemingly small
experience innovations create massive leapfrogs A unique and human brand voice. As brands
up the curve. Our connected world chooses digitize, ironically, they can begin to humanize,
the remarkable over the good with unexpected becoming more personal and more real. The
speed. Technology that has been on the shelf unique behavior, the voice and attitude of the
for several years suddenly accelerates when experience start to matter.
designed into the simple, effortless solution that
takes off: Amazon’s one-click membership model; The moment of acceleration and leapfrog comes
Tesla’s seamless fusion of batteries, ergonomics from innovating the experience with true craft and
and charging stations; Venmo’s drag-and-drop artistry. In tomorrow’s world, the idea of “customer
payment simplicity. experience” is not a discipline or a department or
a satisfaction score, it is the main job a company
“Customer experience” leadership, once thought undertakes to create value and leapfrog.
of as good service or a satisfaction score, is

Experience artistry
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5
Relentless problem-solving
The cultures that thrive under uncertainty share a relentless pursuit of experimentation

If the purpose of a company is to embark Deep empathy. In a “we must find a way” culture
on an endless journey to keep sensing and of solving, true empathy means caring about
solving problems, achieving and maintaining the customer’s life enough to keep iterating and
success requires a different culture and way of trying, knowing that there’s always a better way
managing and organizing. It requires a view just waiting to be discovered.
that an organization is a solving machine, not a
production machine. That rules are for changing, Speed before perfection. In the physical world,
not following. That yesterday’s approach is by product speed and organizational speed were
definition worse than tomorrow’s. largely in sync. It took years to design and retool
to make a car, and the pace of mobilizing the
The processes of most of today’s businesses are tens of thousands of people involved mirrored
built for a world of probability, quality assurance that timetable. But as products become digital
and risk management. Where demand can and development and launch cycles compress,
be forecasted and stage gates assure it will expedited piloting and iterating on the fly
be effectively met. They are built to be “right” trumps perfection.
and to minimize risk of failure. But cultures
that thrive under uncertainty caused by rapid These five disciplines aren’t the province of the
change are fundamentally different. A culture of start-up or “new economy” companies. They
relentless problem-solving means: represent a new and essential organizational
mind-set, applicable to all businesses striving
Learning over knowing. While structured to cultivate the most important ingredient
product roadmaps and stage-gated processes for success: a culture of open, optimistic and
are designed to deliver (on time and on budget), relentless experimentation.
an innovator’s toolkit of broad experimental
portfolios, beta quality prototypes, throngs of
collaborators and co-creation sessions is built to
discover. The latter is starting to matter a lot more.

Tapping collective intelligence. Greater

collaboration, bottom-up empowerment and
freedom to stray and to solve are all critical to
tackling the big unsolved problems. Companies
need to systematically adjust behavior, policies,
processes, workspace design, training and
communications practices, with the aim of
making innovation efforts as inclusive as possible.

Relentless problem-solving
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A Culture of Relentless Problem Solving

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Welcome to the
Beginning

Conclusion
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Viewed through a historical lens, the degree of change upon

us now will certainly surpass what was encountered in
the Industrial Revolution. When we debate how much the
“millennial” or “centennial” consumer is truly different from
the rest of us, consider the shock and wonder of the young
person leaving the farm for the factories of London in the
early 1800s, realizing that one no longer needed to make his
or her own furniture or clothes. And when we ask ourselves
how much business models are really changing, consider
that the very idea of the corporation, the LLC, was illegal until
1825. Today, we are still at the beginning of an even more far-
reaching transformation in customer needs and the models
that will serve them.

The number of unsolved needs, and the new potential to

solve them, is simply exploding. For those with strategic
imagination, something great is just beginning.

Conclusion
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MEET THE AUTHOR

John Marshall
Chief Strategy and
Innovation Officer

Contributor Design
Anna Maltabarow Jenifer Lehker
Senior Marketing Partner, Design
Manager
Bethany Lesko
Senior Design Director

Rui Maekawa
Design Director

lippincott.com

© 2018 Lippincott, a division of Oliver Wyman, Inc.