The future for established brands is uncertain with studies over the past few years, with Innosight suggesting 75 per cent of S&P 500 companies will be replaced by 2027?.
So whats driving the need for innovation And how can you ensure that any innovation is successful To fully appreciate why things must be different you have to glance backwards.
Our current models for success and business strategies were forged in the furnaces of the Industrial Revolution and refined in the centuries since.
They were built for a world that is stable and predictable and where change is incremental. For major corporates your strategy couldeffectively be one of, be first , be the biggest or be the fastest .
Big companies could effectively block or stem rapid innovation just by being more efficient and offering consumers a lower cost. Or, if you spotted an innovative product you could always get a copycatproduct out, faster or cheaper.
In short, big brands held all the aces and could muscle their route to market. Things werepredictable and slower.
But the Digital Revolution is re-writing the rules of business and fundamentally altering consumer behaviours. Over the past decade we have seen seismic change impacting all industries.
Technology has caused mass disruption by making it easier and cheaper to enter new markets than ever before and harder for market leaders to maintain a competitive advantage. To ensure they survive the strategy now has to be shape your future .
Companies have to proactively adapt to this new, emergent world. They need to constantly innovate before someone else does and eats their lunch.
As WPP CEO Martin Sorrell said: You have to be prepared to cannibalise parts of your operation; so I believe in eating your own children.
Read more on innovation:
- How does your company carry out R&D?
- Five steps to become recession-proof: Economic gloom doesnt have to spell doom for UK SMEs
- The business survival instinct: Innovation in times of uncertainty
- Innovative Businesses
How technology has changed the rules
The world is now in almost constant flux you cannot win by just being the biggest or most efficient. Technological innovation is happening on such a scale and at such pace that you simply cannot predict what the world will look like in six months let alone five years.
(1) Created a climate of revolution not evolution
Technology isnt creating incremental change it is creating whole schisms. Massive stepchanges just as we underwent when we moved from the agrarian age to theindustrial age.
And these changes will happen much faster and globally. This means you cannot use the past to predict the future. We can’t use normative models and past research and trends to set out strategies.
All our base principles andframeworks are next touseless. It would be likepredicting what would happen in theindustrial age using the agrarian principle of living by the rise andsetting of the sun.
(2) Changed the world
Technology is all pervasive. It is not justchangingindustries which use or are reliant on technology, it ischanging all businesses. As Im fond of saying we are all tech and data companies now whether we like it or not.
It also pervades beyond business technology is fundamentally changingour behaviours, how we use our time, how we process information and make decisions, how culture is created and shared, how we socialise and even oursocietalstructures.
How market leaders can innovate
At Independents United we specialise in helping brands make revolutions happen and we talk a lot about the need to disrupt rather than just innovate. As Facebook wrote in their Little Red Book (a kind of induction manual): If we dontcreate the thing that kills Facebook, then someone else will.
There are lots ofexamples of big and successful businesses who failed to heed this mantra and live to regret it. Think Kodak. Think Blackberry. Think Blockbuster.
We emphasise the importance of working with entrepreneurs and developing an entrepreneurial mindset. We believe this is one of the key ingredients in creating innovation successfully.
The ability to see beyond the current rules of the game and spot opportunities to disrupt. Witness Airbnb or Uber, of course, but alsocompanies like Casper who aredisrupting very old and traditionalcategories in this casemattresses!