Two weeks ago, we published an article here on how organisations are being urged to embrace & imbibe innovation across the value chain. In the second part of this article, co-authors Pavan Soni & Sanjeev Malhotra explain how you can actually do this.
Here are a few actionable insights on what you, as a corporate leader or a growth-oriented entrepreneur, can do to embrace change and innovate profitably. These recommendations relate to talent engagement, customer engagement and partner engagement, respectively, and embrace the sheer rapidity and pervasiveness of change.
Broad base your talent engagement model
There is no reason for you to be able to attract, retain, motivate and deliver through the best and the brightest talent. You may desire them, but them may not. The imperative then is to expand the catchment area and look at the work in a broader fashion. Two inputs here. Firstly, re-think the organizational boundaries in terms of ownership and partnership. You must explore engaging with a wide variety of talent that may not traditionally fit into your organizational milieu, owing to the sheer bell-curve requirements. Think of artists, freelancers, failed entrepreneurs, college dropouts, adventurists, and other non-conformists who may offer your organization the necessity nudge to think differently. They needn’t be with you for a long duration, but try making the most from their short stints. Secondly, explore new means of engagement with these varied people. Compensation is the old, boring mechanisms, which lends itself to moral hazard in the face of growing challenges and opportunities. Think of short-term contracts, exploring the open market of talent, gain-share models, or some means of equity engagement. That’s how Netflix managed to improve the accuracy of its algorithm of movie recommendation; by opening up its database and incentivizing the winning team with a million dollar in cash. The new age talent calls for new engagement models. Be experimentative.
Solve the problem with the customer, and not just for him
With a myriad of talent lying outside your organization, there’s no merit in believing that you can solve someone else problem better than some third person. Take the guesswork out of the equation and work with the customer, and not for the customer. Instead of spending money and precious time on conducing market research (which seldom is accurate), competitive analysis, or second guessing your industry trends, it might be far more convenient and accurate to engage with the customer. She can lead you to the exact problem and even help you come up with a reasonably good solution, provided you empower her. How to truly and deeply engage with the customers? Here’s how. Firstly, redefine who your customers on the lines of her needs instead of your offerings. Your offerings are just incidental to her ever expanding needs. You wouldn’t want to be stuck selling horse whips in a growing market of cars! So broadly define her needs and wants and modulate your proposal accordingly. Secondly, create avenues to co-create with your customers, instead of keeping an arm’s length relation of a buyer and seller. She may not always know what she needs, but with a little help, she would most likely surprise you. So, embrace the uncertain, systematically.
Redefine your organizational boundaries
Lastly, the partners. The Transaction Cost Economics get redefined in today’s age and time, where the cost of doing a market transaction has radically come down to an extent that transactions do not have to suffer through organizational hierarchies. Companies can run leaner and more connected, with far lower cost of operations than traditionally deemed possible. Hierarchies must give way to swifter market transactions. In this new scheme of things, the vendors become partners and instead of negotiation on price and quantities, they now co-create keeping customer’s flexing demands in mind. Even traditional rivals are coming together to crack bigger problems. A case in point being the alliance of Toyota and Suzuki on electric vehicles. A two-fold shift in paradigm is called for here. Firstly, critically analyse your core operations and seek the best in the market who can do it for you and re-focus on what’s your unique contribution (read Hedgehog). It’s not wise to spread yourself so thin, especially now. Secondly, share your insights freely to enable more problem-solving opportunities by the community. Think in terms of ecosystems instead of dyadic buyer-seller relationships. It’s a matter of time before the invisible hand of the market take over the visible hand of the management.
Be the pioneer than being the bystander
So, where does it leave your business? Don’t wait for the next technological breakthrough, or the competitive move, or, worse still, an upstart around the block; learn to embrace innovation. It would only be wise to invoke the insight from the great Austrian Economist, Joseph Schumpeter, who noted -“situations emerge in the process of creative destruction in which many firms may have to perish that nevertheless would be able to live on vigorously and usefully if they could weather a particular storm”. You only hope then that you are not on the receiving end of the creative destruction.
This article in part of our latest content series called ‘Raise Your IQ: Innovation Reshaping India’s Technology Culture’, co-authored by Sanjeev Malhotra, CEO of NASSCOM Center of Excellence IoT & AI and Dr. Pavan Soni, innovation evangelist & founder, Inflexion Point Consulting.
If you’re at the forefront of innovation in India and want to be featured, write to email@example.com