South African entrepreneurs need to keep innovating as they look to grow their business and compete in a global marketplace. But how does one innovate for growth? What are the practices that some of the world’s most pioneering companies use to generate a pipeline of new customer offerings? We investigate four practices used by market-leading firms to foster innovation:
1. Open Innovation. Procter and Gamble have discovered that the number of new products emerging from their huge research and development (R&D) department is dropping off. Feeling the pressure to keep bringing new products to market, they are using an alternate approach to innovate, referred to as “connect and develop”.
They begin by defining what it is that consumers will desire in the next few years. Then, instead of handing the problem over to the R&D department to solve, they get their managers to look far and wide for businesses, universities or government labs that have already made progress in the area in which they are looking to create a new product.
They then partner with these outside organisations, giving them the opportunity to sell through the Procter and Gamble distribution network under the Procter and Gamble brand. They used this method to find the technology to print jokes and cartoons on Pringles chips and to develop the Mr Clean Magic Eraser, used for cleaning concrete surfaces.
The key to this type of innovation is to continually scan the environment for other firms with whom you can partner to creatively solve customer problems.
Making it Work: Open Innovation
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2. Pet Project Innovation. Google started off as the pet project of two Stanford PhD students. The project has grown into a multibillion-dollar organisation, but the founders have tried to ensure that many other pet projects will emerge from within Google to create value for the organisation.
Google employees dedicate 20% of their time to work on a project that falls outside the scope of their regular activities. They strive to get their pet projects listed on the company’s top 100 projects list and have consulting times with top-level executives to discuss the progress on their projects. It is out of these pet projects that innovations such as Google Maps, Google News and Google Desktop have emerged.
Making it Work: Pet Project Innovation
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3. Driven Innovation. Discovery is one of South Africa’s truly innovative organisations. It created huge disruptions in the medical aid industry by offering clients rewards for looking after their health and giving clients the option of a medical savings account. The organisation has continued to launch new business lines and new products.
These innovations are driven by the Discovery founder and CEO, Adrian Gore. On a regular basis, he will call a core team of people together and give them a deadline for a new product. He stipulates the date on which he wants the product to launch and sends them off to decide what that product should be, how it should be developed, and what they need to do to meet the launch date deadline. He leaves them to resolve the product development and implementation issues and only offers advice at certain points in the process or when called upon to do so. This creates a paradoxical mix of freedom and pressure for employees working on these projects, but in most instances, it results in innovative new products that are lapped up by the market.
Making it Work: Driven Innovation
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4. Methodical Innovation. Ideo is a product design firm based in Paulo Alto, California, in the heart of Silicon Valley. The organisation is highly respected for its ability to continually churn out innovative products for clients. Its product portfolio includes Palm PDAs, Nike sunglasses, the first ever computer mouse designed for Apple and the 25-foot mechanical whale used in the movie, Free Willy.
Ideo has developed a process that it uses over and over again to enable the company to continually innovate. It has developed this process over time, and now the effective application of this methodical process is the source of Ideo’s competitive advantage. See the Make It Work sidebar (right) for ideas on practical implementation
Making it Work: Methodical Innovation
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