(Excerpt from The Star Principle by Richard Koch)
1. Innovation is best based on what you already do best and most distinctively. Innovation is powerful when it suits the new category you have invented rather than the main market, because it makes the new category even more attractive to its target customers.
2. Effective innovation makes it impossible for competitors to catch up. This type of innovation never stops. Rivals can’t get closer because the stars are always widening the gap in value delivered to customers.
3. The best innovation reinforces and extends profitable variation. Innovation is not charity. Real, sustainable innovation kills two birds with one stone – it makes customers happier, and it make your venture more profitable.
Innovation is hard. It takes deviant thinking and persistent non-routine action. There is no point, therefore, in wasting precious energy on innovation that does not satisfy all three golden rules.