The Innovation Arena Is No Place for Timid Souls
It pays to be bold in the pursuit of innovation, says Mike Pongon, CEO of Point B Inc.
June 17, 2019
Every business that is doing well today is tomorrows potential victim of disruption. In fact, we often hear that market disruption is one of the things senior executives worry about most. My advice? Dont wait for someone else to shake up your world. Disrupt yourself. Being bold with your strategy can be difficult when times are good, and business is growing. It feels comfortable to just make hay with what youre already doing successfully in the current environment. In addition, from board rooms to the front lines, people will challenge change when everything seems to be going well.
But heres the thing they may not see: Your business model is eroding right now especially if youre successful and building a strong reputation for doing well. Competitors notice success and start to think about how they can get a piece of the action, how they can do one better. Before long, the strengths that once set you apart become the baseline.
Successful businesses can never afford to stand still. So why not disrupt yourself? Making a big shift and a big move can mean big gains. And it doesnt need to mean big risk.
Understanding opportunity is a listening skill. Its essential to focus on the marketplace and to look outside your organization to see what you have to offer. Listen to customers and prospects and look at market trends. Sometimes a spreadsheet will solve a problem more cheaply than a fancy new application built from scratch. Understand what youre up against in the current marketplace. How are customers solving this problem today? What are the competitive barriers to entry?
Too often, business leaders go directly from opportunity to solution. If you had your solution or product on the market today, why would it be superior to the alternatives already available? Make sure you can articulate this from the customers perspective.
To envision this approach in action, consider the recent shake-up in transportation services. More people than ever are traveling and commuting for work. Roads are clogged with more vehicles. A market opportunity exists to help people get around more easily and predictably in less time. However, there are many alternatives competing in that space buses, trains, light rail, cabs, shuttles and peoples own vehicles.
Then, along came Uber with a superior solution. The ride-sharing company disrupted the market with a tech-enabled service that made getting around faster, easier and more certain. Uber quickly took market share and grew the market. It put a disruptive new business model in the drivers seat.
Making a big bet can be scary and changing your entire corporate strategy to pursue an opportunity can be risky. You dont need to do it. Investing buckets of money in R&D and innovation is scary, too. You dont need to spend it. With a small investment and a scientists mind, you can investigate opportunities quickly. Begin by forming a hypothesis. Once you understand the market and find an opportunity, make an educated guess. Then go out and test it.
Design a few experiments to find out if you have something customers are interested in. I experiment using the rule of three. Bring together three very different thinkers with different strengths and use the opportunity, alternatives, superior approach to test your assumptions in the marketplace with actual customers.
If your idea for a product or solution isnt resonating in the marketplace after three months, it may not be the right idea. Dont be afraid to change course and adjust quickly. In addition, every opportunity can be broken into three types of segments. It might be, for example, a large-enterprise, small to medium-size business, or startup solution or product. It might be high-volume/low-cost, mass-customization, or a custom solution or product. Consider which segments make sense to explore the opportunity and pursue your experiments.
As a chief executive, I value an approach that lets us constantly put our best ideas to the test without betting the farm. When you can afford to make testing part of your ongoing practices, you lessen the chance that you will be disrupted by somebody other than yourself. You encourage a culture that is comfortable and confident with innovation.
Most businesses complicate the concept of innovation. It doesnt have to be arduous or mysterious. When you understand the opportunity and experiment like a scientist, a small investment can lead to big gains.
Mike Pongon is chief executive officer of Seattle-based Point B Inc., an employee-owned management consulting firm with revenue of $203 million. www.pointb.com