Saturday, May 30, 2009

Dynamic innovation sandbox: where thinking inside the box matters

“Think outside the box” is a phrase commonly used to encourage creativity. However, when Amazon CEO Jeff Bezos says, “I think frugality drives innovation, just like other constraints”, Jeff is referring to ‘thinking inside a box of constraints’. Similarly, when Marissa Mayer, VP of search products from Google, talks about their latest mantra, “scarcity brings clarity”, she is talking about working within a set of constraints. When Ratan Tata kick-started Nano project it was clear that the creativity has to happen within the stringent price tag of Rs. 1 Lakh.

Few organizations deny the importance of “constrained creativity” as a useful approach. However, very few execute it systematically. That is why, ever since I read about Prof. C. K. Prahalad’s “Innovation sandbox” approach, I got hooked onto the metaphor. This approach is called an innovation “sandbox” because it involves fairly complex, free-form exploration and even playful experimentation (the sand, with its flowing, shifting boundaries) within fixed specified constraints (the walls, straight and rigid, that box in the sand). I wrote about it last year in the article: Building innovation sandboxes.

The question that I find interesting is as follows:

Can innovation sandbox be used as a tool for systematic innovation for any business?

In the past year or so, I have been experimenting with this tool successfully both with my clients as well as in my own business. I believe it can be used (a) as a lens to analyze innovation projects and (b) as a tool for designing strategic experiments. How do I start designing a sandbox? I would start with one of the three types of constraints: (1) Unmet customer need (2) Core asset – such as a technology or a competency (3) a business model. Put that as a wall of the sandbox and slowly build other walls. Now, revisit the constraints after each experiment and see if there is a need to change any of the constraints. Let’s see an example how it works.

Before Paul Buchheit’s AdSense experiment (see How AdSense almost got killed, AdSense story take-2), Gmail project sandbox had 3 primary constraints: (1) Unmet customer need: having an online email application with an ease of search, (2) Core asset: search engine (3) Business model: fixed free space plus revenue on additional space. After the AdSense experiment, the third constraint (business model) got changed to “Unlimited free space + revenue from advertisements”.

I presented a paper “Dynamic innovation sandbox: an approach for strategic innovation” in Strategic Management Forum 2009 conference held in IIM Bangalore this week (27-29 May). The audience was primarily strategy researchers from Indian management schools and they gave good inputs. I am especially thankful to Prof. Rishikesha Krishnan of IIMB for the discussions on systematic experimentation and Prof. C. K. Prahalad for his inputs on this paper.


  1. This is a good observation Vinay. I remember reading the article by CKP and recollecting his definition of the Sandbox metaphor.
    The Box has rigid boundaries while the sand is what one could mould to 'create'.
    These boundaries remain rigid for most innovation types.
    In my view the three fundamental (relatively constant)boundary conditions of the SandBox could be:
    ~ Values (Ethical) from the Founder/ Leader
    ~ Value (Economic) for the Stakeholders
    ~ Value (Functional + Emotional) to the Customer

    The sand can then be moulded to devise newer ways of achieving these boundary conditions.

  2. Posting the inputs I received from CKP:

    From: Prahalad, CK [] sent: Thu 5/28/2009

    Thanks Vinay for your paper.

    Yes, the sand box is and has to ve dynamic.

    Three issues for you to consider as you develop this 1. There is no generic sandbox. This means that constrained innovation and the sandbox concept is generalizable but not what the constraines are as you have identiifed in your example. Each context needs specific constraints; but the idea of constrained innovation is generalizable. This is an important distinction 2. Unlearning and forgetting : see the paper on Dominant Logic (Prahalad and Bettis; SMJ) 3. Core competence (see C.K. Prahalad and Gary Hamel; The Core Competence of the Corporation, HBR, 1990) Aren't there good Indian examples to illustrate your ideas?
    warm regards