Embrace innovation to avoid being overtaken
- Business Model Shifts
As a large organisation, you always want to be blazing a trail and setting the pace for the rest of the market.
But when small, agile startups seem to be several steps ahead in innovation terms, the concern is that an established business’ legacy and reputation aren’t enough to keep your brand in pole position.
However, with the right attitude and business outlook, there’s no reason why you can’t continue to lead the way forward.
The fear of being ‘overtaken’ is essentially the fear of being made obsolete. This is a very real concern for many big companies. In every sector, it seems that there are hundreds – even thousands – of small players out there testing different solutions and fulfilling ever-changing customer needs.
These disruptive companies usually start very niche or local – before expanding at a rapid pace that often takes everyone by surprise. Sure, they’re pushing boundaries – and making established organisations nervous – but this sort of open innovation is very necessary for overall market development.
Having market forces push the envelope can be good for bigger companies too – opening up opportunities for acquisition and mutually beneficial collaboration.
What’s important to keep in mind is that in large corporations, it’s the people – not the organisations themselves – that succumb to fear. The urgency to invest in innovation usually comes either from a need to catch up with competitors or, in the best case scenario, from having an ambitious leadership team.
But that’s not always the case. The brands that are most at risk of getting left behind are those that think they’re invincible. Rather than opening up to see what’s happening outside of the company walls, they freeze and double down on their existing strategy. Take the last year, for example which has seen long-established companies across the world go under – both through the wider implications of the COVID pandemic and by their failure to adapt.
If they’d used the opportunity to address and analyse emerging market trends and needs instead of just focusing on their internal numbers and legacy practices, they might have had a fighting chance. But, perhaps they just failed to create a guiding innovation strategy – to alleviate some of the fear and turn it into action and value exploration.
Staying ahead of the game
Continuously reviewing what value your brand offers its customers should be a number one priority. In an era where various business model shifts are happening, the concept of innovation – of keeping up with the latest trends and technologies – needs to be framed alongside the value your product or service provides.
When companies create their wider business strategies around this value-driven perspective, a whole new world of opportunities opens.
That said, it’s not enough to focus on the product, service, or pricing alone. Other aspects define value too – such as speed of delivery, frequency of delivery, peace of mind, sustainability; to name a few. In other words, having a great solution is no longer enough; to lead the market you need to deliver purpose and convenience.
The world, and with it any companies’ actions, is getting increasingly transparent, fueling the need to be authentic. As a result, we’re now seeing a growing number of brands take more ownership of their actions – with many investing in various altruistic initiatives and even taking a stand on political matters. It’s a bold disruptive brand that positions itself on often controversial matters – but ultimately, having such a strong resonance with a particular demographic cements its overall market position: and fosters greater loyalty.
Mutually assured disruption
Sooner or later, each business model is disrupted. But one main difference is that disruption happens at a much faster pace nowadays. As a result, companies should not only keep their eyes open when they create business strategies but they should also design, build, and manage a good innovation strategy.
Ultimately, there will always be incumbents that will target a niche market – and it’s easy for a big player to overlook their potential at first. But given the often accelerated trajectory of some smaller players into global powerhouses, it’s clear that disruptive forces should be treated with due respect by bigger brands. They have much to learn from there.
One critical issue that many big corporations focus on creating a single standout solution – they search for a golden egg. As we know that over 90% of innovation initiatives don’t see the light of day, creating an agile and balanced growth portfolio is the smarter way to de-risk your investments and eventually serve the customer’s needs better.
That’s where so many get overtaken – when their singular focus detracts from the rest of the innovation landscape. But, if you can’t beat them as a bigger brand, you can always buy and collaborate with them – as long as you get in early enough.
Interested how you can implement an organizational innovation capability from scratch or increase the effectiveness of your existing one? We’d love to have a (digital) coffee to see how we can help to de-risk your next business opportunity! Email Marije or leave your details and we’ll contact you.
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