Innovation strategies

Organisations need agility to innovate, ie adapt quickly (nimble), be aggressive, change course frequently, respond to user feedback and analytics, have better ideas and deal with competitive threats.

Example of this is Darrell Lea. In 2014, the firm was losing around A$ 200,000 a week as it tried to be a retailer, distributor and manufacturer. With new owners, they are now only a manufacturer with limited production lines, ie reduced from 1,000 to 100 and constructed a new factory.

It is around 100 year old Australian-based confectionery company that is fighting 2 fronts, ie
- corporate giants like Mars, Nestlé, Cadbury, etc
- supermarkets like Woolworth and Coles.

Yet it is producing sales growth at a rate between 2 to 3 times faster than the broader confectionery market.

Key to its success is being nimble and having a fast innovation cycle.

The company is proving adept at handling the shifting consumer landscape, ie
"...where communities are railing against excessive sugar consumption and authorities are worried about obesity levels......the sugar debate is more focused on sugar drinks than confectionery and more about consumers thinking about the hidden sugar in food..."
Simon Evans et al 2018

Confectioneries are treated like a treat.

The supermarkets and others are keen to encourage Darrell Lea as a competitor to the multinationals. New players like Australia Post (national postal service) is expanding into
"...impulse purchased and gift giving segment in its retail operations..."
Simon Evans et al, 2018

It is expanding into the export market which makes up around 20% of total sales; the US is the dominant market.

Agility doesn't mean chaos.

There is a misconception that start-up cultures need to be scrappy and unstructured. But an agile team still needs a rigorous process (planning, implementation and feedback) to be effective. The overall process is

- operate the organisation on cycles (perhaps 6 week)

- set 2 to 4 goals at the start of each cycle

- workshop what each team has to do to support these goals

- then divide the cycle into 3, two weekly sprints

- hold daily full team stand-up meetings where progress is reported (including confidence of reaching the goals)

- at the end of each fortnightly sprint, everybody reports their achievements plus their commitments to the next two weeks.

NB don't allow new ideas to derail the process. Park the new ideas to one side and review at the end of the cycle.

The key elements of the process include

- visualise (create a story wall where the increment goals are recorded; each team member creates coloured cards for the different tasks they have to complete to meet the goal, eg

"...Design and development would build different parts of the product, sales and marketing would put in place a process to launch to customers..."

Rebeka Campbell 2016

Each day team members move their card across the wall from "to do" to "doing" to "testing" to "done"; the story wall gives a view on the progress of each project

- helicopter view (senior management needs to develop the habit of observing and planning, eg take time out to reflect on progress, digest data, review strategy and plan for the next cycle)

This process encourages team members to choose their own tasks, become publicly committed, daily communicating their process and every fortnight presenting. When implemented, this process did not stifle people's performance. In fact it improved.

From a survey conducted by University of Sydney business School (2016), 3 major strategies dominated, ie

- in-house innovation labs (aiming to uncover the next big start-up or business idea to transform the organisation)

- venture capital fund or invest directly in start-ups (the average tech start-up takes 4.2 years to market deliver)

- hackathons and cultural programs (to transform a corporate culture into a more disruptive, agile workplace)

Yet one of the world's most innovative companies (Cochlear) does not follow any of the above 3 strategies.

Using a transitional team approach to innovation, eg Mirvac (using 40 innovation champions selected as a demographic slice, ie different business units, ages, seniority, etc to work on innovation in addition to their normal job. They were selected as high achievers, open-minded, love to learn and really inquisitive and passionate about innovation.  Their focus is on predicting what customers will value in the future. One of their successes was off-site manufacturing of wall panels which reduces building time by 40%, increases quality-control, reduces workplace hazards and site wastage by 60%.

Some key tips include

- allowing champions to emerge from anywhere in your organisation and provide them with incentives

- keep bureaucracy at a minimum during the engagement stage

- need to develop ideas to commercialisation stage

(source: Patrick Durkin, 2016)

Innovation involves a culture of review, evidence-based improvement and goal setting
"...innovation springs from adopting a forward-looking and outward-looking approach..."
Roy Kelley, 2015

Three critical factors allow innovation to succeed
i) a desire to improve and openness to change
ii) a culture of risk-taking to seek inventive solutions
iii) a preparedness to fail that is combined with a readiness to learn from experience

Remember: corporations are designed to ensure the success of their established businesses. New businesses have a culture of their own and present 3 main challenges

i) the emerging businesses use the lack hard data, especially if offering cutting-edge products or when their technologies are not widely understood in the marketplace

ii) new businesses require innovation, fresh ideas and mavericks that can clash with the current businesses that generate revenue

iii) there is a poor fit between new businesses and old systems, especially budgeting, HR management, etc.. The systems are designed to handle the operational aspects of the mature businesses, not the strategic, conceptual and entrepreneurial expertise that start-up's require.

To effectively manage the balancing act between new and existing businesses requires attention in 3 areas: strategy, operations and organisations.

"...develop strategy by trial and error. New businesses operate in highly ambiguous environments, where the full range of alternatives and outcomes isn't known, leading to many possible directions and evolutionary paths. The higher level of ambiguity in new businesses implies that corporate entrepreneurs won't get it right the first time. Because hard numbers are difficult to come by and strategic options are difficult to identify, past practices, too, offer little guidance. Experimentation is essential. Managers must begin with a hypothesis about what will work and what won't: then they should search for ways of validating or invalidating their preconceptions..."

David Garvin et al, 2007

According to Australian Business Foundation, (2007), innovation provides most of the basis for productivity increases.

It is claimed that entrepreneurs are more likely to be 'thrill seekers' who take calculated risks and

"...have more energy, get up and go, and they want to go out and do wonderful and great things..."

Chris Jackson as quoted by Fiona Smith, 2008 m

Only other hand, one of the major differences between a manager and entrepreneur is that the entrepreneur does not fear making mistakes.

"...learning is about making mistakes and learning from them..."

Richard Branson, 2008

Failure is more about not giving something a go, ie

"...failure is not giving things a go in the first place. People who fail are those who don't have a go and don't make an effort......there are few people who have tried something and fallen who didn't get enormous satisfaction from trying, and I have learned more from people who have tried and faltered than from the few charmed people for whom success came easy..."

Richard Branson, 2008

"...failure is not the enemy but fear of failure is. Failure and success are inextricably linked......we must learn to accept and get the most out of failure in order to achieve true success..."
Aalto Entrepreneurialship Society, (2013),

Entrepreneurship and corporatisation were viewed as opposite ends of the risk spectrum, ie entrepreneurship was the business opportunity paired with passion, perseverance, creativity, tolerance for risk and relentless problem-solving ability. The other focused on long-term goals such as secure 5-year plans, with strong fiscal and management practices. This is changing with more of the entrepreneurial mindset required in the corporate world, ie
- embrace uncertainty (usually entrepreneurs have a strong vision and inspiring mission which attracts the best talent; they embraced the uncertainty of the disrupted world; know when to ask for help.  The corporations need to adopt this and focus on new growth opportunities, acknowledge knowledge and skill gaps and where the best talent lies in order to collaborate with to take advantage of opportunities)
- change your view on failure (treat "failure" as gaining new knowledge for future opportunities; focus on servicing the needs of strategically important customer segments;  continually learn from attempts that don't work, ie fail fast, fail cheap, learn fast, adapt fast, etc)
- be an authentic partner of value (successful start-up executives have a strong foundation to explore their unique advantages as they have a strong sense of who they are, what they know and who they know; understanding your capabilities as a business helps you generate powerful partnership possibilities.

Despite what the media's impression, entrepreneurialship is not glamorous but is slog.  It is hard work that requires a very strong focus, large amounts of resilience, grit, commitment, etc.

One of the challenges is to maintain the customer focus so that you earn their trust. Balance this with other stakeholders' needs, like investors who are keen on growing fast.

Some hints on being a successful entrepreneur (Lydia Gilbert, Dia&Co - online retailer for large female clothes)

1. Follow your passion (in order to create something extraordinary, you must love and deeply believe in what you are doing)

2.  Get comfortable with being uncomfortable (ambiguity is here to stay; use it to give you the adrenaline and drive to do incredible things)

3. Focus relentlessly on the customer (in decision-making that customer comes first; exceed their expectations)
(source: Peter Bradd, 2016; Rachel Botsman, 2016b)

Entrepreneur are just limited to business work. For example there are community entrepreneurs or social change agents?
Community entrepreneurs are typically individuals, groups or organisations that seek out and act upon opportunities to transform communities and create a positive impact on community values.

They are different from social entrepreneurs in that many social entrepreneurship models focus on individuals and the disadvantaged, in contrast, community entrepreneurship focuses on the community as a whole and creates a sense of abundance for all.


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