How to beat the giants?
Speaking of innovation, who are the giants to be beaten? Large competing companies? Bureaucratic and decision-making barriers within your own organization? Our personal fears of risk and return? All of these are some of the giants to be overcome by an innovator, whether you are a small entrepreneur or a large entrepreneur. But, winning these giants takes more than courage. It demands from the innovators diverse attitudes and actions that, when combined, are capable of operating what many may consider “miracles” and others may only call luck.
All of this goes through what is called “risk culture”. According to Seely Brown, a prominent author, professor, researcher and former chief scientist at Xerox and director of the Palo Alto Research Center (PARC), “It is only possible for invention to happen in organizational life when culture really encourages it to run risks ... very few companies have achieved this, and even fewer are currently doing it.”
These pandemic times has led most entrepreneurs to suffer from what we can call the “panic syndrome” of risk, while others find ways to make money out of it or at least survive through it. The panic syndrome makes a person who was one day small and managed to reach a little higher in his career or in the market to be afraid to take risks as he used to do in the past when he didn't have much to lose.
The giant problem is exactly about the attitude of comfort or fear that overcomes most of us in times like this. In fact, one of the greatest dilemmas of innovation lies exactly in the excellence of the management of large companies, taking the least possible risk and always looking for the markets with the highest margin in the shortest time, while many innovations start with markets with lower margin and dubious results.
Wow! How can innovation be so problematic and difficult to deal with, requiring new attitudes, actions, behaviors and visions? All of these issues initially involve understanding the levels at which innovation occurs.
Imagine the innovation of a touch of lemon or orange in your soda, or putting a flavor to a spring water bottle or a small increase in the memory capacity of your cell phone's chip. These represent the first level of innovation, that is, the basic one, which makes small improvements to existing products and services. Now imagine making small improvements, but this time directing the product to new market niches, such as mixing rum with cola and offering it to an specific market segment (but, over 21 years of age, of course). This is the second level that involves the so-called relative innovations. These two levels constitute what some authors call “incremental innovations”.
The third level of innovation is what draws the most attention when it happens. It concerns conceptual innovations, that is, those that generate products or services with a new concept, value propositions or revolutionary business models. Some authors call them “radical innovations” or “disruptive innovations”, because they break with the concepts previously widely known.
The dilemma between being an incremental innovator or a disruptive innovator has been very well presented by the renowned Harvard professor, Clayton Christensen, in his many books. It clearly shows how giant companies, considered to be of a very high managerial level, were surpassed by small innovative companies, such as the giant USX steel defeated by small Nucor Steel in the thin plate segment and IBM defeated by Conner Periferals in the memory drive segment, leading Toshiba, Zenith and Sharp led the laptop segment in the early 1990s.
As in “Back to The Future” movie, history repeats itself and the same radical innovations is occurring right now in some traditional segment such as the mining industry, chemical processing Power, Battery, Retail, Logistics, Aerospace, Aviation, Agriculture, Shoes, Apparel, etc. Nanotechnology, Biotechnology, Robotics, New Materials (mainly graphene), Additive Manufacturing (3D) are spurring such uprising from small tech companies against giant companies in those fields of expertise.
As in the biblical story of David who hit Goliath with a stone over his eyes, many large companies were hit without time to react by small, innovative companies. The main fact that contributes to this is that large organizations are always looking for incremental innovations and, due to several organizational factors, are unable to carry out the breakthrough innovation despite having the means and resources necessary for this. Therefore, we can assume that the secret of survival is to balance incremental and disruptive innovations well. But, this is not an easy task!
Nowadays, this all seams to be a so-very-common-place idea for many large corporations. Even so, only now we are starting to see large corporations in the food & beverage, steel, construction, battery manufacturing and many other giants in the so-called real economy industries adopting cultural aspects of start-ups, IT and tech companies. However, be aware that no culture is about changing with a fancy art mural painting or a cool game room in the main office. It takes much more than that. It takes proving access to real-time information, correctly incentivizing creative thinking, as well as behavioral aspects that normally are not compatible to large corporations.
It is about this and much more that I will be writing about it in this i9C Innovation Series here on LinkedIn.
So, remember: whatever giant you are up against, face it with the courage, determination and faith of a David against Goliath, but never forget that having a sharp aim takes a lot of technique, training and skills!
#Innovation # riskculture #Nanotechnology #Biotechnology #Robotics #NewMaterials #graphene #corporateculture