The world is changing fast – and not just as a result of COVID-19. Undoubtedly, the pandemic has forced businesses to adapt rapidly but the need to embrace innovation, take risks and disrupt existing business models has been a feature of the modern business world for a number of years now.
Still, many corporations, particularly larger ones, struggle to adopt the innovation-first mindset required for ongoing success, despite there being no shortage of concerning examples for them to draw from. In 2007, Nokia’s share of the smartphone market stood at 49.4%. In six years, it had dwindled to just 3%. Its story is not an isolated one. In less than 60 years, 88% of the companies that made up the Fortune 500 in 1955 were gone; replaced by more agile competitors, casualties of “creative destruction.”
Ironically, these businesses are often victims of their own success. As many organizations grow, they lose the ability to innovate that helped make them successful in the first place. They become more risk-averse and wedded to existing business models – after all, that’s what made them successful in the first place (in addition, they are organized to maintain this status quo). In many ways, big businesses’ inability to innovate is deliberate. Good managers fail because they do everything right.
The modern, ambidextrous business
If you look at the life-cycle of a business, a start-up is created with innovation at its heart – its raison d'être is to come up with a new solution to an existing market problem. For mature businesses, the goal is very different: profitability. Everything else takes a backseat – including innovation. But this in-built inertia no longer works in a rapidly changing world populated by agile competitors that stand ready to whittle away at your market share. The modern business needs to be ambidextrous, combining both scale and speed – but most are not managing to achieve these dual aims.
Fortunately, most of the challenges that are preventing organizations from delivering long-term, sustainable growth that leverages innovation, not only iteration, are internal. They are also surmountable.
We have identified six strategic pillars that are essential for businesses to tap into to overcome the growth dilemma:
1. Innovation strategy
In this pillar, we investigate and establish your innovation strategy, and further align on future growth aspirations and how you can win in the market.
2. Innovation portfolio
In this pillar we facilitate alignment among senior leadership about the size and boundaries of your innovation portfolio. Which bets do you make? What are the boundaries for successful innovation?
3. Innovation governance
In this pillar we look at formulating the alignment around how to fund your innovation activities and deciding who is making important investment decisions in your company.
4. Innovation accounting
In this pillar we look at how you measure the success of your innovation activities and the ventures you build? We help you align, and set your metrics for success.
5. Agile processes
Most impediments for innovation occur on a tactical level; with the majority related to IT, legal, compliance & quality controls. In this pillar we look at how we can help to recreate new corporate policies or reframe existing ones to enable innovation teams to work faster and avoid future obstructions. We ultimately allow your company to compete on both speed and scale.
6. Entrepreneurial leadership
How can senior leadership help to encourage the development of the right type of mindset for entrepreneurial leadership and facilitate this within innovation teams? In this pillar, we look at how this culture can be fostered within large corporations.
Combining speed and scale
Smaller businesses do not have a monopoly on good ideas, but many larger corporations are simply not set up to make the most of new propositions, business models, and innovations. This is a waste; one that has resulted in once-household names ending up on the corporate scrapheap. In this new world of innovation, it’s time for corporations to show that they can combine both speed and scale, move beyond the minimal viable product stage and drive business impact.
In the highly competitive business world of today, there are only two options: innovate or die. Our tips will help companies deliver sustainable success built on the principles of scale AND speed.