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Scale up innovation to create new disruptive business models that are profitable and sustainable
Disruptive innovation is displacing the status quo. It creates new markets and changes how a market operates. In most cases it impacts the leaders in the industry and shifts customers’ expectations and wants. Recent examples include Amazon, Spotify, Airbnb and more recently Uber.
Companies are now looking at how disruptive innovation can be used to have a societal impact.
Identify future trends – If you’re looking 3 years ahead then you are already behind your competitors. For instance, from my experience of talking with senior executives at pharmaceutical firms, they’re looking 7-10 years into the future. Try to identify what’s on the far horizon. Considering that social benefits are of increasing importance to Millennials and Generation Z, it’s highly likely sustainability and responsibility are at the heart of many trends.
Probability and impact matrix – Plot the future responsibility and sustainability trends on a matrix to identify which are most likely to happen and have the highest impact on your business. From this you have identified the key issue/opportunity to focus on.
Evaluate your value proposition – The world is changing and businesses need to change with it. There’s a good chance that what worked in the 20th Century won’t work in the 21st Century. Understand the key issues and needs of your customers, and then review your value proposition to assess whether it’s fit for purpose in 5+ years’ time.
Be prepared for the long-haul – A new and disruptive strategy takes longer to develop than the conventional approach. This is the reason why most disruption comes from smaller businesses as they have the resolve and drive to play the waiting game.
Be prepared for the risk – Creating a new disruptive strategy has a greater risk associated with it than a more incremental form of innovation. But a disruptive strategy, when deployed, achieves much faster penetration and higher degree of impact.
Remove any internal silos – Although the R&D team will be central to the development of this strategy, ensure other departments are integral throughout the stages. Marketing, sustainability and procurement functions have specialist knowledge in what the customers want, how the business and environment is evolving, and what current capacity there is for new strategies. Input, at the correct stages and from different departments, will ensure the chosen strategy is an optimised strategy.
Be prepared to go outside your current industry – Most disruptive innovation comes from companies that never existed in that market place prior to the new product or service. Recent examples include; Apple and Google (mobile phone market) plus Tesla and Google (automotive industry). Be prepared to find sustainable innovations in new industries. Also be prepaid for new disruptive entrants into you market.
Work with your suppliers, NGOs, consultants and competitors for ideas and ways forward. Also ensure you have a handle on new technology. Things are moving at a rapid pace in the tech space and should be constantly researched and monitored.
Tom Peters once said ‘You can’t shrink your way to greatness’ – implying the need for constant improvement and innovation. However, it would be wrong to assume that businesses need to consume more to grow.
Some of the most innovative and sustainable companies are learning how to do more with less. This is what all businesses should be striving for. If your business isn’t, then it’s highly likely that someone else is. Don’t get left behind, embed sustainable innovation at the heart of your business.
The 15th Responsible Business Summit will debate scalable disruptive innovation in its ‘Innovation Keynote’. Company group chairman of EMEA Janssen, president EMEA of Salesforce and the CEO of Fairphone will share ideas on to create new disruptive business models that are profitable and sustainable. For more information on this session and the other 30 plus, click here
June 2016, London
EthicalCorp’s flagship event features 12 CEOs, 50+ speakers and over 400 attendees all debating how business can create a positive impact through smarter, more sustainable business strategy