“If you only do things where you know the answer in advance, your company goes away.”
-Jeff Bezos, founder, and CEO of Amazon
The last two decades witnessed a lot of innovations in products and technology across the globe. Innovation is the key to growth not only for the companies but also for the economies. Lack of innovation has wiped out many companies from the corporate world, who were once known as the leaders of their industries. The story of Kodak is a classic example of this. For companies like Nokia and Blackberry, lack of innovation cost them the tag of the market leader. Even though they made many efforts for a comeback, the immensely competitive environment is preventing them to take back what they had lost a few years back. In the current ecosystem, only those companies which give importance to innovation can survive. Sticking to the usual strategies will slow down the growth of the companies as well as that of the economies.
In this fast-paced era, to sustain the business, companies should come out from the old mold and search for innovative ways to make their business competitive and profitable. Different organizations may have different motivations for innovation like increasing market share, expansion of business into new geographical areas, broaden the product range, betterment of product quality, etc. They can achieve this through co-creation with customers and suppliers, emphasis on talent management, collaborating with other companies, and technology up-gradation.
The word co-creation refers to creating value jointly. Co-creation with customers will help the organization to get feedback directly from the clients which can act as an idea for a new innovation. Through this, the firm can follow the changing customer interests. Co-creation with suppliers will help to make the supply chains more flexible i.e. augment them to manage more risk and thereby improve the business performance. This is a useful approach for the companies having businesses in multiple countries as it helps them to understand the economic, socio-political and cultural trend of different countries.
An emphasis on talent management will lead to innovation. Companies like Google, who’re know for their creative and captivating work environment have a strong talent model. The current century has seen a shift in the concept of talent model. A modern workforce is a perfect blend of global, diverse, gender-balanced and innovative employees. At present, the companies who give emphasis on innovation uplift the concept of virtual workplace in which the employees work together across long distances and they communicate electronically. Along with financial rewards, they also offer non-monetary benefits to retain talents. Hiring highly talented and responsible part-time workers is also an integral part of new employment structure.
It’s a well known fact that in-house innovation will cost more to the companies and it will put a cap on its growth. So collaboration with other companies (especially with foreign companies) is a better idea to grow by spending less. Through association, companies can improve the quality and quantity of ideas, access to new technologies, execution support, being part of a broader network for sales and distribution, connect to people who can execute the ideas quickly, and lower innovation costs. So we can say that collaboration is the key to growth.
Rapid and more frequent technology changes can challenge the growth of the company. So it’s equally important to go for a technology up-gradation whenever necessary to remain in the innovative path. By adapting new technologies, the firms can do more in less time. It’ll also help them to understand the customer preferences, triggers that led them to buy those products and their loyalty towards the brand. Use of social media will help the companies to come-up as a successful and a better appealing brand. Today, a technology-driven customer-centric approach is the success manthra for many pioneers.
While executing the ideas, the enterprises should involve the employees of all departments in the innovation team. An integrated cross-departmental approach –involving people of finance, IT, marketing, sales, and etc- will help the firms to identify the areas which need innovation the most.
So, the bottom-line is that there’re many good ideas floating in our eco-system. But due to lack of risk appetite, they never get implemented. And a lack of implementation means no innovation and thereby no growth.
Pankaj Singhania Co-Founder Lakewater Advisors