Monday, November 30, 2009

Methodical Steps Towards Innovation Part I - An Oxymoron

The first question to ask: Where do we even begin in order to innovate? We may start by looking at one's mission e.g. helping professionals create value.

How does this guide us towards a more innovation-driven organisation? The glue lies in the ability to understand the needs of your customers, especially needs that are not met in the marketplace.

Next, we need to understand how compelling these needs are from the perspective of the customers. It will be fair to say, customers need to create value for themselves, thereby generating surplus wealth. The more surpluses there are, the more discretionary can be the consumption. There is a line from which we can draw, defining how much customers are willing to consume and what kind of consumption they are wiling to indulge in.

It does not necessarily imply that the more the customers consume, the more value can be created. Customers at the point of purchase, may perceive that is value for money to own the goods. Value encompasses emotional, rational and moral considerations. But when push comes to shove, it will be the rational being that will dominate over the emotional being. What we are saying, is that when times are bad, people are more risk-averse. However, if we do follow the adage of a wise investor, then we should be very "greedy when others are afraid and be very afraid when others are greedy".

Form the above, it is possible to discern the need to segment the market when we pitch our value proposition. The market segmentation must be aligned with the philosophy of one's business model and resonates with its mission ( purpose ) and core values. Therefore if you get your ideology correct, the path towards innovation can be rather smooth.


Let's examine some of the initiatives to drive innovation .....

1. to sell content and software that run on cellphones and other devices.
Apple's iPhone has taken the lead showing why consumers will hop onto the internet bandwagon using mobile devices running on smart applications. This trend is extending to TVs ...


2. to invests in new and "adjacent markets" - value propositions that are related to, and can bolster sales of existing products.
Cisco has ventured into videoconferencing hoping that it can drive sales of routers and switches.

3. to maintain a robust pipeline of both disruptive and sustaining innovations by permitting individuals with the organisation to work at innovation - i.e. to try new things with ample resources to test ideas; as well as letting the market determine the way forward.
Cisco achieves this by decentralising decision-making through the setup of councils. Each of these councils will be empowered to decide which initiatives to push forward thus speeding up the innovation process.


From the above, we can infer that the first step is to define ( scope ) the problem that one wishes to solve, and this process can be speeded up with an organisation having the right core ideology and having the right people on board. Given a fishing rod and taught how to fish, you can go figure it, right?





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