In an age teeming with opportunities to serve tech-savvy, global, demanding customers, corporations are actually finding it much more difficult to innovate.
Pressure to Perform
- The pressure to make money for all stakeholders in the short term makes it much more difficult to fund people and programs even once removed from the immediate revenue path, which includes research and development.
- Innovating for customers involves understanding the needs of the customer and collaborating with various internal departments, including sales, marketing, engineering, operations, support and finance and various geographical units of the organization in order to deliver what the customer wants.
- Unfortunately, collaboration between groups, divisions, roles, and geographies has not historically been rewarded, to the extent that for many people and companies, it’s difficult to meet and know others not within your team, location, level or role.
The Acquisition Path
- Partly because of the decimation of R&D budgets and the lack of communication and connections between internal groups, many corporations have elected to go the acquisition path in order to innovate and expand.
- Unfortunately, this M&A path is a mixed bag at best – the challenge becomes to integrate a new product/service/offering/operations/team with existing sets of same. This is generally never an easy task and few have done it well, particularly when companies get large.
- In fact, the divestments, spin-outs and going-private choices we’ve recently witnessed are testament to the fact that not all purchases and integrations work well. The market might not be there. The tech integration might be too big an obstacle. The strategy might not have worked as intended, or the execution may falter.
- As we’ve stated in previous posts, the Age of Personalization will introduce fervent, demanding customers with high expectations for integrated, customized solutions that deliver exactly what they want and need, immediately, in every facet of their lives.
- Corporations need to bridge their silos and create an innovation path to serve these customers or become irrelevant and lose their market edge.
- Elements of successful offerings for the next age include:
- Big-data driven, for that’s the only way to individualize offerings efficiently
- Global, reaching customers where they are
- Modular, so that it can be integrated with other solutions
- Operationally efficient, for that’s the only way to deliver to the door cost-effectively
- Mobile and web-enabled, so you reach the platforms used by the customer
- Cloud-based, so that solutions can be efficiently managed, secured, and scaled
- Social, so that customers can easily spread the word and become ambassadors
- Collaborative, so that you can better coordinate within an organization and across stakeholder groups
- Dynamic, so that solutions can be easily updated based on feedback from any source
- Scalable, so that the solution can grow and satisfy customers, expand to new markets and even expand to new solutions
See a future post with more descriptions under each element above.
10. Winning corporations need to be tech-driven, customer-focused and able to bridge silos and work collaboratively with partners across the ecosystem. Read our Connections at the Leadership Crossroads post for tips on identifying these types of leaders.
These are our thoughts on hurdles to innovation – what are yours? Your thoughts are welcome at email@example.com.
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