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A paradigm change is here. Are you ready to innovate?

The world is facing a paradigm change

We are facing a technology driven paradigm change in business and society. It is no secret that business models, products, services, culture and behaviours are changing. We are entering a new era of game changing innovation and new technology. New market entrants are also turning business upside down. Companies such as Uber, Tesla and AirBnB are redefining business models. Technology such as the blockchain, artificial intelligence, mobile and contactless payments are changing the way we do business. Energy, healthcare, consumer products and financial services are seeing competition from highly innovative start-ups and fast moving SME’s. It seems that a new technological revolution is emerging and old business models will crumble as a new world emerges.

This Huffingdon Post article about the acceleration of technology explains how this is occuring. I particularly like the final sentence of the article ‘There has never been a more exciting time to be alive’. An exciting time maybe, but also a challenging time that requires organisations to respond pro-actively to the rapid changes we are already beginning to experience. Is your organisation ready?

Don’t become irrelevant

Larger organisations tend to move slowly and are most at risk from new entrants. Their market share will be eroded at first slowly and then obliterated as social habits and preferences change. Consumers learn quickly and have little loyalty. They can swap supplier or change product at the touch of a screen and are keen to get the best price and the best service. If a new innovative product enters the market place offering multiple benefits over whatever it is replacing, the providers of traditional services had better react quickly, or find themselves obsolete.

How do you make sure your organisation is ready?

Keep your finger on the pulse

Understand your market and take a keen interest in new and emerging technologies. Having research teams or innovation experts spending time analysing the risk, impact and potential opportunities will help to keep you informed and ready to respond. Make sure that you are continually responding to emerging technology by asking the questions; How can we use this? How does this threaten us?

Built a portfolio of possibilities

Create an innovation portfolio of potential projects and implement proactive rather than reactive strategic planning. This means identifying high potential candidate projects. Allocate sufficient resources to build a thorough understanding of the opportunities and risks. A business case that includes market research, investment appraisal and analysis of alternative options will provide valuable data which and assist with informed decision making before committing resources. This approach is preferable to reaction based planning when market share is already being eroded and urgent action is required to prevent further damage. Segregating or flagging projects as ‘innovation’ will allow them to be monitored and prioritised accordingly.

Make change the norm

Encourage the entire organisation to embrace change and continually contribute to innovation goals. This will often require a change in culture which will not occur overnight but an organisation that embraces change will ultimately be more agile and able to respond to external threats more effectively. Senior managers should be accountable for delivering innovation while managers and employees should be rewarded for it. Everyone in the organisation is, to a greater or lesser extent, responsible for innovation and continuous improvement. This requires employees to understand what innovation is and what is expected of them.

Ignore market disrupting ideas at your peril

Many organisations will not invest in products or services that will impact their existing market share. At best this is short sighted, at worst it is a completely blinkered approach to innovation. Ignoring an idea because it will impact your own market share is leaving the door open to competitors and new entrants. It is just a matter of time before your market share is eroded anyway, so researching and investing in market disrupting ideas should be a priority.

Be courageous but not capricious

Innovation is about taking risk, but not taking risk for the sake of it. The purpose of a robust innovation process is to allow interesting ideas to flourish but not to invest in them unless there is a reasonable chance of success. Managing risks is an important component of successful innovation management. By it’s nature, innovation is something new that has not been tried before, so courage is required to jump in at the deep end. However, this does not mean jumping in at the deep end without some knowledge and understanding of what you are doing. How many times have you heard senior managers saying “We need and App!” or “We need to get into the Blockchain” without fully understanding how, why and what the benefits will be. Embrace new technology, but research it too.

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