Corporate innovation: Why disruption is important - Toni Knowlson
We’re facing an unprecedented time in history where technology moves faster than we can. Computer power doubles every couple of years and already there’s one mobile phone per person on the planet. In business, the power dynamic has shifted from the company to the consumer. Before the internet existed, companies became increasingly successful if they could grow by controlling more of their supply chain. They were rewarded through economies of scale. The internet economy has shifted that power dynamic. Now, a company’s speed to market determines its ability to capture new opportunity and achieve growth, which leaves the big players at a disadvantage they’ve not faced before.
So why are the big companies being left behind? It’s actually quite difficult to disrupt yourself. Big businesses are successful because they achieve operational stability and efficiency. They set up systems and processes to limit risk and exposure rather than capitalise on risk. Trying to create something disruptive in an environment like that is like starting a fire in the rain.
What can companies do about it? One strategy is to invest in a startup ecosystem and then acquire the businesses that start to gain momentum. Salesforce’s recent acquisition of Quip demonstrates that approach. Another approach is to create an internal incubator, like a startup inside your business, designed to focus on solving problems that will impact you not today, but in the future.
The latter approach, while not new, is still at an early stage of development within the Australian business landscape, but is quickly gaining momentum. There are now firms that exclusively consult to big business on their innovation incubators (Inventium and Pollenizer) and even small consultancies that focus on small business (Alex Stewart, Digital Services).
At Melbourne IT we have a flagship innovation program in our Mobile Application Development division, previously known as Outware. Innovation focuses on a variety of areas from new technology, new products and services and new business models. We run a rigorous methodology that will fully fund the development of the innovation should it pass the business value proposal stage.
We hope that sharing our approach to innovation can stimulate some ideas in your business that adds value to you and your customers.