Faster horses and Operating Systems

A 2023 report by BCG showed business strategies that actively prioritize innovation led to a 50% higher revenue growth compared to those that don’t.

But who drives the innovation? Visionary entrepreneurs or customers? Here are 2 instances that shed light on the ambiguity.

Henry Ford, “If I had asked people what they wanted, they would have said faster horses”.

Bill Gates, “Your most unhappy customers are your greatest source of learning”.

Both visionaries built long-term business, but which approach is right?

Company-Driven Innovation: Pioneering the Future

Early Market Entry:

• HBR reveals that companies embracing internal innovation often secure a first-mover advantage. In a sample of 500 successful product launches, 80% were attributed to organizations with an inclination towards foresight rather than a reactive stance based solely on customer feedback.
• Apple's iPhone underscores the potency of venturing into uncharted territories. The strategic leap into smartphones, when consumer demand was not yet fully realized, stands as a testament to the power of visionary leadership.

Disruption of Industries:

• In a survey, McKinsey found that 84% of executives believe that disruptive innovations are essential for sustained growth. Tesla's foray into electric vehicles, backed by forward-thinking technological advancements, reinforces the idea that companies driving their innovations can reshape entire industries.

Customer-Driven Innovation: Meeting Present Needs

User-Centric Design:

• In a Nielsen Norman Group survey, 68% of participants indicated that a positive user experience is a key factor in their decision to engage with a brand. Google's continuous refinement of its search engine, shaped by user feedback, has solidified its dominance.
• Iterative development based on real-time user feedback has enabled Amazon to build lasting relationships and foster brand loyalty. Two key drivers of long-term business growth.

In the 2 decades of unlocking disruptive business growth, we have seen that the best business strategies always comprise visionary leadership that keeps a keen eye on customer feedback.

Combination of Visions:

• Surveys from Deloitte and PwC affirm that balancing visionary leadership with customer feedback yields 1.5 times more profitability and sustained growth.

Data-centric:

• Gartner found 87% of senior business leaders believed that data changed the way they make decisions. Visionary foresight and customer insights were the ingredients behind the business strategies that led to high business growth.

The examples shown and the statistics drawn illuminate that growth lies at the cross-section of company-driven and customer-driven innovation.

The best embodiment of this is perhaps Space X. The customer (NASA) wanted a cheaper cost of travel but could only think of making existing one-time-use rockets cheaper. Overlaying that with the visionary foresight, “Do you throw away a plane after a singe journey?” gave Space X the USD 2.9 billion contract.

Authored by Tarun Chakraborty, on behalf of EQUiTOR Value Advisory