By Eric van Niekerk, Research Lead, Innocentrix
“Why fix what is not broken? We are focused in accordance with our strategic plan and we know how to do that. We have no need for innovation.”
Is this a familiar phrase coming from the boardroom in your organisation? This attitude can place organisations in danger of not just losing the competitive edge, but also being disrupted altogether, due to the rapid, daily changes in the business environment.
Change is constant
The modern era is marked by accelerated technological change. Take, for example, the fact that less than 60 years separate the first manned aeroplane flight (1903) and first manned space flight (1961). Much of this is due to the invention and widespread use of computing technology. This rapid technological development is not only prominent in aerospace development, but has influenced every aspect of modern life. Business is no exception – email, websites, tablets, mobile phones, none of these were even fathomable in South Africa 30 years ago.
With such a growing technological landscape, the ability to innovate has possibly become more important than ever, and will continue to be critical for years to come. One of the most disruptive developing trends, which many organisations have built their innovations around, has been the emergence of the Sharing Economy.
The last three years may have seen the rise of the sharing economy, but this idea has existed for quite some time. The beginning of the 21st century saw the dawn of peer-to-peer sharing. This refers to the ability of internet users to share content through the internet via an interconnected network of individual PCs, negating the need for dedicated servers. The first internet site to facilitate peer-to-peer sharing was Napster. In 2012 it was found that far more than 30 million people use peer-to-peer services on a daily basis.
Sharing is caring
The idea that individuals would “share” content in such a way that an active community can be established has led to several innovations. One example is the 2009 California startup, Uber. Uber began as a novel idea – that individuals would be open to the idea of “sharing” their personal vehicles with others for a small fee. The implementation of this idea in the form of a clever app rocketed Uber to immense popularity, and the company is now valued at more than $50 billion.
Airbnb, another app that uses a very similar business model to Uber, has also found success in the sharing economy. Airbnb allows for users to “share” available living space. Users can find affordable, short term accommodation through the app, by making use of a space “shared” by other users. Airbnb has surpassed many of the world’s biggest hotel chains since its humble 2008 beginnings, and the company is now valued at over $20 billion.
For both Airbnb and Uber to have become such runaway success stories, several technological changes had to be in place. Firstly, every user of the platforms need to have access to a reliable internet connection, and also need to own a smart device. In the last 10 years, the demographic for smartphone and internet users has grown considerably, with billions of active daily internet users. Capitalising on these developments means that the new kids on the block, Uber and Airbnb, are acting as serious disruptors in their market, much to the dismay of their less innovative competition.
Innovation has enabled small companies, who originate from very humble beginnings, to grow to global business powerhouses. Business strategies that would have been laughed out the door 10 years ago have suddenly skyrocketed in popularity. What is now certain is that approaches, methodologies and successes of yesterday does not guarantee future survival. One needs to be at the edge of your industry, but also immersed in your ecosystem, connected far beyond your organisation or country’s borders to stay on top.
So, as an established company, what areas can you apply innovation in? Where will you need to go to create the future? What needs to be considered and how will you engage with or partake in the sharing economy? From what we have seen, for companies some major considerations are:
Stakeholder mapping – Who are your stakeholders, where do they fit and what can they contribute? Furthermore, what are the relationships between different parties and who are the decision makers and the experts? Look at who your stakeholders are and what their relationship is with other organisations. Use this information to identify your organisation’s position in the business ecosystem, and ultimately develop strategies to refine and advance this positioning.
Appropriate use of technology – In recent years we have seen a boom in the availability of Innovation Management Software. Some software platforms can assist in creating an innovation drive within your organisation, tapping into the innovative minds of your employees. Others can make managing and implementing innovative projects a breeze, with robust tools that can share information across the entire organisation. Investing in innovation technology can be the catalyst to some great innovations within large originations.
Engagement models – How do you engage, measure, communicate and manage relationships, both with employees and external partners? Ensuring proper communication and engagement is key in retaining an open platform for identifying and overcoming business challenges.
What’s in it for us? – Understand the dynamics of the stakeholder groups you engage with. What motivates people and what is in it for your organisation? Creating an understanding of “what’s in it” for you and your clients can enable strategies that ensure both parties get the most out of the relationship.
Time – A commodity no one has enough of. Questions like “What would be the most effective means of engagement?” is the first step in getting the most out of your time. Effective time management can lead to higher outputs, lower stress levels and less resource inputs.
Measurement – Is your current innovation plan working, what are the outputs, what do you consider success to be? Having robust measures for innovation projects will ensure that the strengths and weaknesses of an innovation strategy are known. From there, more accurate investments can be made, and the innovation process can be adapted to suit current organisational needs.
Sustainability – How will you ensure that the conversation does not wither away and die, that outputs are valuable, that people are accepting responsibility and accountability? Keeping an eye on the future is key to innovation. Build an awareness of global trends and disruptions, and ensure that your organisation can grow into the future. Future markets, future customers, and future products – these are all aspects that can be capitalised on today already.
Many more can be added to the above. The fact is, you can do business as usual, but the consequences might be more severe than what could have been foreseen. Theories and excuses will abound, but innovation is actually more than just a buzzword. Call it what you want, innovation will remain a necessary business strategy to get your company to where it needs to go and ultimately stay on top of your market space.