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Understanding the Innovation Matrix

How to use the Innovation Matrix? How to put the Innovation Matrix to work for your innovation project? These are some of the questions I address in the article below.


Understanding the Innovation Matrix, in colors

Innovation matrix - identifying innovation opportunities
Innovation matrix – identifying innovation opportunities


I/ Understanding what is most important to consumers

The x-axis deals with importance.

  • What is important in the eyes of the consumer? Which production activity is the most importance? Why is it the most important? What makes it important, in particular ?
  • Conversely, what is the production activity that seems the least important? Why is it so unimportant?
  • Also, the innovator may ask what are the production activities that are neither totally unimportant nor totally important? Why are those of relevant relative importance?

In asking such questions, innovator will get the client to describe many production activities. And at one point, innovator must ask his client to explain what defines importance: what is the criteria that defines importance?

  • Is a specific production activity important because, it is necessary to complete the subsequent production activity? Is a specific production activity important because it would be impossible the complete to get to the end goal without completing the specific production activity at hand?
  • Is the production activity important because in the eyes of the client’s boss or in the eyes of the client’s client, the specific activity creates the most value?


Once this question has been clarified, then the innovator must identify the production activities that are part of his client’s day-to-day job. And then, he must ask his client to rate each production activity on a scale of 0 to 10 in order to rank the importance of each production activity relative to one another.


II/ Making sense of what does the job and what does not do the job: getting to assessing the client’s satisfaction


The y-axis deals with satisfaction. Satisfaction describe the degree to which the client is happy with existing services, solutions, technologies and products that he may use in order to complete a given production activity.

  • If the client is unsatisfied with existing solutions, then he will be tempted to look for alternative products and services in order to complete the same production activity.
  • On the other hand, if the client is very satisfied with existing technologies and solutions, then he’ll be less tempted to look for alternative solutions.

It’s critical for the innovator to assess whether his client is satisfied with the status quote. In order to do that, he should ask his client whether he’s satisfied with existing solutions

  • If the client has never used alternative solutions to complete the production activity at hand then he may be happy with the status quo.
  • However, it could be that although the client has not himself use alternative solutions, he is aware of colleagues who are happily using alternative solutions.


For example, at the turn of the 21st century, many people were flocking to digital music even though it wasn’t legal to be using music-sharing sites such as Napster. These consumers were expressing the fact that there were unhappy with existing music products. Most music companies—especially record companies—would only focus on the fact that these consumers were behaving illegally. But the innovators should look beyond and focus on why these consumers are flocking to alternative solutions.

  • Why are they unhappy and unsatisfied with existing solutions?
  • What is about existing solutions that make them unattractive, time-consuming, impractical, costly and overall unreliable?

III/ Assessing the size of the market

The size of the bubble expresses the size of the market: The greater the bubble, the greater the market. In order to evaluate the size of the bubble, the innovator must not focus on prospective analysis, future trends, or even existing data, which tends to guess future development based on data from the past. Guessing the future is always very difficult. That’s why, innovators should focus on how much money existing clients are actually spending today in order to complete existing production activity to be enhanced. What counts is how much they spend today, not how much they say they would spend nor how they might spend in a hypothetical future. What counts is analyzing actual purchasing behavior.


If there is no monetary value attached to a specific production activity, then, the innovator must refer to another measure of value. Most often, this other measure will be ‘time’.. It could very well be that the targeted production activity doesn’t cost anything to complete but it is extremely time-consuming. In this case, the innovator must be able to measure the time that is spent in order to complete a specific production activity.

IV/ The prevalence of the problem

Finally, the last element in the innovation matrix has to do with the prevalence of the identified problem. This is expressed through the color of the bubble. The lighter the color, the rarer the problem; the darker the color, the more prevalent and widespread the problem. If the innovator is to focus on a large market, then he must look for problems that are not specific to one individual but that are rather shared across millions and millions of consumers.


For example, at the Singularity University, the incubator selects startups on the basis of having identified a problem that is shared across 1 billion consumers. This is equivalent to a problem that concerns every single European, every single North American, every Japanese as well as most middle-class Indians, Chinese, South Americans. In order to develop an innovation that has a big impact, the innovator must focus on identifying big problems.


If the innovator is focusing on a business-to-business (B2B) innovation, then he must be sure that the problem that he has chosen is not specific to one individual, one team, or one single business unit, but rather common many business units, ideally in many different companies, in many different industries across multiple geographies. This remains critical in identifying a prevalent problem


So this is how to use the innovation matrix. The innovator must start his quest by identifying his client’s production activities. Among all production activities, he must focus is energy on those which

  • are most important to his clients,
  • provide little satisfaction with existing solutions,
  • remain are costly in money or in time,
  • are common to many organizations.




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