Expect to be disrupted
- May 02, 2017
A smart approach to investing in innovation
That innovation is important and necessary for survival goes without saying. While there is no universal solution for organisations looking to improve their ability to generate, develop, and disseminate new ideas, some strategies are superior to others.
“The process of innovation should continuously introduce new value or benefits to your customer. If you’re not doing that, you can expect to be disrupted,” says Pierre Aurel, strategic project manager, e4. “Without investing in innovation, you will always be susceptible to competition. The right strategy requires time, funding and a process to create the innovation required for future growth.”
Securing a competitive edge is one goal of innovation; the other is finding new markets as well, allowing a business to move both vertically and laterally across markets. Aurel notes that in order to future-proof themselves, organisations need to objectively evaluate their strengths and weaknesses before embarking on a strategy of innovation.
“So instead of the tired old SWOT analysis, an evaluation of how well the business performs in three stages of innovation: Ideation, Creation and Diffusion. A business needs to understand its own internal dynamics first and ultimately where it wants to go.”
An innovation value chain offers a comprehensive framework for doing just that. By breaking innovation down into the three phases of idea generation, conversion, and diffusion, the strategy encourages organisations to look at ways to improve their weaker areas first, either through collaboration, outsourcing or acquisition.
Aurel points at Google’s approach to managing the innovation process and budget allocation operating on the 70/20/10 model. “70% of projects are dedicated to core business, 20% of projects are related to core business, and 10% of projects are unrelated to core business. This staggered approach ensures they are able to keep the lights on while searching for the next breakthrough.”
Crucially, businesses should look at innovation as a long-term process rather than a knee-jerk reaction to a changing environment. A helpful starting point is listening to customers and beginning the innovation process from there. “Customer centricity is key, so talk to your customers, listen to their needs and views. Don’t create an exclusive innovation team that operates in isolation. If they are not collaborating with the rest of your organisation, it’s a major problem,” Aurel explains adding that innovation shouldn’t be the exclusive function of one team or executive, rather it should be inclusive, transparent and allow ideas to come from anyone. “Don’t shoot down ideas without using some metric or model to validate the potential of the idea,” he says.
To be sure, finding the right balance for innovation to succeed is a challenging prospect for organisations. Aurel suggests looking for external help while ensuring the innovation process is funded and staffed appropriately. “I think every organisation has the ability to be innovative. Partner with a company in a different industry and create an innovation exchange programme. Swap employees for a couple of days, let them become immersed in different world – their new perspectives and opinions may surprise you.”
e4 is an innovative specialist provider of electronic technology solutions and services. Providing customers with custom-built software solutions and services, e4 focuses on ensuring business processes are streamlined, electronic and strategic in its approach.
The end-to-end service offering includes full management support throughout the service lifecycle and is supported by a 24-hour availability policy.
The introduction of Convergence Partners and Stockdale Street as new investors in April 2016 has enabled the e4 Group to accelerate growth through new product and services development, and further expand its geographic footprint.
Convergence Partners is an investment management firm focused on the Technology, Media and Telecommunications (TMT) sector in Africa. It has a proven track record of developing new investment opportunities as well as adding value to investments across the entire life cycle of ICT assets. Stockdale Street manages the Oppenheimer family’s South African private equity interests invests alongside strong management teams in established companies that have sustainable competitive advantages and favourable growth prospects.
e4 and its subsidiaries employs over 400 staff at offices in Johannesburg, Durban, Pretoria, Cape Town and Namibia with satellite offices in PE, Bloemfontein, East London and Mpumalanga.