Transcript
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COSTAS MARKIDES:
The first message will be that there are different types of innovation out there. There is product innovation. There's technological innovation. There's process innovation and so on and so forth. So the first thing that people need to decide upon is, what kind of innovation should I be aiming for? So if you come to me and say, I want to be innovative. I will say, I don't understand what that means. You have to tell me specifically what type of innovation you want to achieve.
Now let's say you come and say, I want to do strategic innovation. That's good. That's a first step that you have defined precisely which type of innovation you aspire to achieve. The second then is to understand what exactly is this strategic innovation before you start going into the how to. And what is strategic innovation? In my mind, it's very, very simple. It's discovering either a new who. And by that, I mean a new customer segment to focus on in the business, a different customer segment from what everybody else is looking, a different who. Or thinking of a different benefit to add to your product, different from what everybody else is offering, not just functionality but other benefits, and then a different how in the business. And by how, I mean maybe a different way of playing the game, a different value chain activity, a different business model, and so on.
So it's very important for people to appreciate that strategic innovation is the discovery of fundamentally different or new who, what, how in the business. It's not in your product. It's not in your technology. It's not in your process. It's a different who, what, how. That's the second thing that people need. And then once they say, oh, that's exactly what I would like to achieve and so on, then we can start into the specifics of how do you go about discovering.
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COSTAS MARKIDES:
It's not the marketing department, and it's not just anybody in the organisation. There has to be ownership at the very top because you're talking about some serious innovation initiatives here. You're going to redefine who the customer is and finding new customer segment to go after. This is not a decision that anybody can take. It's the board's decision. It's the leadership position. The same way if you say, I'm going to change my distribution method, or I'm going to change my inventory method, or I'm going to change the value proposition of my product. These are very, very important strategic decisions. So at the very least, top management has to be involved.
Now having said that, of course, we need to differentiate between two things. Innovation is, first of all, coming up with the ideas. And secondly is the implementation of the ideas. The coming up with the ideas, I think, could be decentralised. It's not just the board that has ideas. Anybody, anywhere, anytime can come up with ideas. And in fact, we also encourage people to go outside the organisation. Open innovation is the new thing.
Get ideas from outside, from your competitors or from outside the industry or from different countries, from every employee in the organisation, from the marketing department, from the factory floor. Anybody can give you ideas. You can do it through a process. It's a process that top management has to put in place to gather ideas.
And then once you accept that ideas can come from everybody and anybody and so on, the second step is the implementation. Who takes ownership of the idea? And that is where I think at the very top, there has to be somebody that says, I will be the owner of the idea. It doesn't mean that the top person is the one that goes out and implements it. He or she can then say let's form a team of different people in the organisation to analyse the idea and decide whether that's a good idea to implement.
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