By Nuno Periquito
Head of Marketing
Innovation is probably one of the most overrated and misused words in the business world. Startups claim it as being at the core of everything they do, and established companies talk about how they have embraced digital transformation, leveraging their core competences to bring to the market innovative products.
Unfortunately, innovation tends to have a very fluid meaning when the 5 Whys is applied to explore the cause-and-effect relationships, the answer to the “Why” your organization breaths innovation is, most of the times, not that glamourous.
If there is a common understanding that innovation is pivotal in a world with shorter product cycles and low entering barriers, especially for digital products, what does it really mean to be innovative?
More than to give you a recipe, which I don’t believe exists or a playbook of “one size fits all,” my goal, in this article, is to share some of the most important key takeaways I learnt at the Executive Program “Driving Strategic Innovation” (DSI), organized by IMD & MIT, together with like-minded accomplices, which made for great conversations and learnings.
In an article published in the renowned Harvard Business Review by Rita Gunther McGrath and entitled “The Pace of Technology Adoption is Speeding Up”, she asserts “It took decades for the telephone to reach 50% of households, beginning before 1900.” It took five years or less for cellphones to accomplish the same penetration in 1990.” It took even less time for Facebook and other well-known social media apps to become ubiquitous, in our day-to-day lives.
What this shows us is that the adoption cycles are getting shorter. This is certainly true for digital solutions but, looking at the very large and diverse group of industries and geographies, represented by our DSI group, it’s happening everywhere. The only constant in change and survival depends greatly on the ability to innovate and anticipate disruption.
Your company may be doing everything right and still be made irrelevant. The book “The Innovator’s Dilemma,” by Clayton Christensen, showcases several cases studies on this topic. There isn’t a roadmap to follow in a globalized, hyper-connected and borderless world. The company that is going to disrupt your industry, probably is not even a player you are benchmarking.
On the other side, there are plenty of opportunities up for grabs, either in adjacent industries or even in your own industry. It can be either customer needs not being addressed or untapped supply chain opportunities for more efficiency or change. There is a lot of “white space” to be explored and a good place to start is by understanding your industry S-Curve.
By analyzing the industry S-Curve, it´s possible to predict how it will evolve over its life time. Either if it is in the “Nail” stage, where every player is looking for a first mover advantage and speed is of the essence, even if it means cutting some corners; or on the “Scale” stage, where the focus is all about growth and structure or, finally, on the “Sail” stage, where established companies reap the benefits of making it this far by focusing on process efficiency or innovating by expanding product and service offerings, to prepare the organization for further room for growth. The latter is also the stage where, because of their success, companies can become complacent, risking missing out on a new emerging S-Curve.
A good example of why understanding the industry S-Curve can be a life saver is well illustrated in an article published by The Economist, entitled “The last Kodak moment?”. In this article it is explained how Kodak missed the transition to digital photography and one of its competitors, Fujifilm, jumped to another S-Curve when it became clear their business model was unsustainable. Kodak was slower to adopt and missed the opportunity to extend its leadership but “Fujifilm, too, saw omens of digital doom as early as the 1980s. It developed a three-pronged strategy: to squeeze as much money out of the film business as possible, to prepare for the switch to digital and to develop new business lines.”
Like Kodak, companies often find themselves often in a position where they have been extremely successful for years in a specific field, but know that the end is near because of a technological disruption. Think of the music or photography industry, or regulatory issues, such as the ban on specific plastic products, which led to the emergence of a new type of tobacco consumption.
To be prepared means to understand the context your organization operates in, but also the overall trends that can influence it. This is where innovation and foresight practices meet.
By being able to constantly identify and monitor trends, organizations are better equipped to understand how theirs and adjacent worlds are evolving and create scenarios to help deal with complexity.
Contrary to crystal balls, foresight methodologies and frameworks don’t provide definitive answers or glimpses of the future but help organizations to understand S-Curves maturity and transition stages, help embrace new technologies which can enable new business processes and models and help to see new competitors that can represent a threat.
There´s more to innovation then simply adding new product functionalities or having a yearly innovation day. It is an ongoing effort, infused in the corporate culture with a laser focus on creating, capturing and delivering value. This is the subject I propose to address in part 2 of these article series. https://hbr.org/2013/11/the-pace-of-technology-adoption-is-speeding-up
Nuno is a seasoned marketing executive with more than 20 years of experience in marketing, innovation, and technology, possessing a broad set of skills and a results-driven mindset.
A collaborative leader with proven success in managing multinational teams and working cross-functionally throughout the organization, Nuno previously served as Head of Marketing at AnubisNetworks, a BitSight Company; Marketing Manager, Vision Box; and Market Research Manager at WeDo Technologies, all located in the Lisbon, Portugal area.