- Samuel Beckett
Only one company in any market can be the cheapest. Everybody else has to be offer a better service, a better product or a more trustworthy brand. Because companies compete constantly, the bar is always rising and the goalposts are always moving. This is why innovation is so vital. And so August is 'Innovation Month' here on Business Answers. We have white papers, articles, interviews and advice to help you and your business become more creative, more innovative and more competitive.
The innovator’s dilemma
Clayton Christensen argues that truly disruptive – industry-changing – technology breakthroughs came from new entrants to a market and not from incumbents. Too often, established firms focus on refining existing products rather than creating wholly new ones. This is defensive innovation. Spending more on it may be a business necessity but it doesn’t revolutionise anything and it doesn’t create the big payoffs of more speculative risk innovation.
The future is already here
The novelist William Gibson said, “The future is already here, it is just unevenly distributed.” Ambitious companies seek out the future and commercialise it. Doing so requires that they embrace more uncertainty than their competitors do. There is an emerging charter for innovation around Kevin Kelly’s notion of “imperfectly seizing the unknown rather than perfecting the known.”
How to fail
Effective companies don’t fail safe, they fail better. They fail faster so that they can move onto the next project, the next breakthrough. They apply a portfolio model to their investments in innovation. Some are revolutionary but high risk. Others are evolutionary and more predictable. They know that innovation doesn’t end with a blueprint so they build multidisciplinary teams to exploit new developments. They measure and manage innovation performance to balance and fine-tune their portfolio and ensure a pipeline of new ideas over time. This requires an ambidextrous attitude to innovation so that companies learn to be adept at managing both incremental and radical innovation, even though this requires different and sometimes contradictory cultures, processes and leadership styles. Smaller companies often do this more effectively than larger ones.
UK PLC and R&D
It is a commonplace that the UK is good at invention but bad at exploitation. This is partially borne out by the facts. The science base is solid. The UK is second only to the US in share of world science and engineering publications and citations and leads the world on a per capita basis. However, we spend less on R&D relative to GDP than the US, France and Germany and we claim fewer patents per capita. This suggests that there is a genuine opportunity for UK business to compete by leveraging the UK’s science base.
Now is the time to change that and fast-growing businesses can be the main driver of innovation. Thanks to the internet, rapid prototyping and outsourcing, they can compete with much larger companies in this area. But, because they are more nimble, they can execute faster. They can create the ‘disruptive innovations’ that change a whole industry.