“It would be a terrific innovation if you could get your mind to stretch a little further than the next wisecrack”
– Katharine Hepburn, Academy Award winning American actress
In the last blog, we introduced some of the terminology used in innovation. In this post we discuss examples of innovation in the two types of companies – product companies and services-based companies. Interestingly we notice, the former is easily getting into the space of the latter, but not vice versa!
If you study Google for instance, they approach Innovation by –
1) Developing products at “Scale” (more than 1).
2) Doing things that amazes people, make them go ‘wow’. Going the “Radical innovation” way.
3) Systemize by using a portfolio approach. Making various groups innovate independent of each other and changing organization structure. You will notice Google is not simply/randomly developing products. There is a careful portfolio approach that drives a product or a service offering to use the other.
1) They have Centralized R&D departments –
Example – Accenture Technology Labs (where consultants can start their own small projects based on their own needs, interest of discovered problems at client locations)
2) Smaller facilities deemed as Innovation Centres –
3) Sponsors and organize yearly events to develop startups and young minds.
4) The Alliance Network covers over 150 high – tech and innovating firms.
Now the question might come to how should a company innovate? If a company, for instance, provides services to product and services companies – How, Where, When and What should do do for innovation? Open questions – I will discuss in another post! Maybe 😉
Today the world is discussing 4 broad categories of shifts in the world – S-M-A-C (Social Media – Mobility – Analytics – Cloud). So first we look at the underlying shift in the industry they have caused. Why? Because these tectonic shifts have caused innovation disruptions like we haven’t had in a while.
We now are talking of –
- Tighter budgets,
- Higher needs for specialization,
- Digitization of content,
- Increased density of network,
- Flexibility in customer demands and needs,
- Blurring of enterprise & consumer market, and, hardware & software
To respond to the underlying shift a company must respond with at least 4 changes (of course, there are more) –
1) Need for flexibility
Meaning, the need to see how to use the business ecosystem. Can rival companies start working together as well? The concept of Co-opetition is one of the aspects of flexibility. Alliances is another. Developing or adding to flagship without being hit on profit margins is a third.
2) Need for dense internal collaboration
A drastic need to develop core in-house talents and look at what lies on the fringe and outsource those rapidly!
3) Perception play
How strong do the marketing and communications influence sales – classic example: Apple Vs Microsoft. In the consumer market, people would rubbish Microsoft products much easier than Apple which may or may-not be the case in reality. Apple projected itself as a “cool-company-that-can-innovate“. Another is Microsoft Vs Google, in the enterprise people ‘felt’ more secure with Microsoft than Google….. (Things of course are changing but you get the point I am making… I hope)
4) New business and delivery models
Adaptable to changes to the external market, to the internal reorg’s, to ensure no cannibalizing of revenue!
This has been a lengthy blog on innovation – I think I should stop for now! It’s interesting to see the pace at which the world is changing and the impact of innovation on the market and vice versa. It’s like an intricate game being played out there. Well, I hope people will play the game of life responsibly and innovate themselves! Sometimes a question can change your whole life. An interesting one is a question every Harvard Business School grad is asked as part of the Portrait Project! What is your answer?
Until next time