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Stop innovating for the sake of innovating

Many companies are trying hard to satisfy their internal innovation strategies. Some approach me when it’s already too late.

In these cases, what appears at first to be a good innovation, at closer inspection is a dog. Important steps are skipped such as conducting robust scoping, feasibility and assessing marketability. At other times the business model design is flawed.  Mistakes which are costly to correct.

If your organisation is hurriedly looking for ways to innovate and be future ready, make sure you are asking yourself these questions:

  1. What are we in the business of?

Creating a new business which is not aligned to the overall vision and mission will meet friction.

In thinking about the core business, clients should be clear on the answer to: What are we in the business of? If the new line of business has a different response to that of core business, then it is time to re-evaluate whether you should be in that business at all.

Allianz has recently ceased providing their Home Assist program to customers. Managing trades persons to deal with emergency situations in the home is not aligned to Allianz’s business of general insurance. To expand the business in that way would detract from where their true value lies. Diluting the core offering.

 

  1. Have we got full control of our core competencies?

Ensure that the core competency is taken care of in-house. This is where value is generated for the business. It is ultimately fundamental to a firm’s success, often providing a competitive advantage. This is also how an organisation is able to respond with agility to an unpredictable future.

Only after the core competency is handled internally can all peripheral aspects be outsourced.

 

  1. Who is the buyer?

Many businesses (particularly start-ups) are inventing products without a clear buyer in mind. The “build it and they will come” mindset runs at an incredible risk to becoming a flop in market if there are not enough of the right kind of buyers out there.

Innovation labs are now being inundated with start-ups looking to salvage their labour of love from falling prey to the digital revolution.  A sound layer technologist found this out the hard way. He felt that there would be a niche market in some way, shape or form only to find out more than two years in that his App was not commercially viable among the low paying niche.

 

  1. Is it globally scalable?

Start-ups around the world are beginning their ventures with one thing in mind. Growing the business to cater to a global market. Ambitious goals for small businesses. Their vision is grand and the drive and motivation back it up. It surprises me that a number of larger Australian companies are still focused solely on serving the Australian market.

Geoff Culbert, CEO of GE knows this all too well. Start-ups are viewed as GE’s biggest potential. They are also its biggest threat. With any innovation undertaken, the view in GE must be to begin with the bigger (global) picture in mind. If your organisation cannot commit to the longevity and intensity of nurturing this type of innovation, someone else clearly will.

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This entry was posted on Thursday, April 28th, 2016 at 5:52 am and is filed under Uncategorized. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

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