In May this year the estimated market cap of a four-year-old social media upstart call SnapChat quietly became equal to that of the 146 year-old business giant Deutsche Bank, the largest foreign exchange dealer in the world.
While the two brands operate in vastly different spheres, the comparison highlights a rate of growth that was previously unthinkable and it just another example of how “innovation premiums” are paying big dividends for brands.
Successful companies don’t get complacent. Rather they are constantly looking for new growth opportunities – even if those are frightening to the industry – or a product set that the company operated within.
Samsung is a great example of perpetual innovation. Once known for cheap phones and TVs, a commitment to iterative improvements and R&D on its products helped elevate it above Apple. A few years ago it surpassed Apple as the world’s most profitable smartphone maker. Samsung has a 28.8% market share in March 2016, with Apple second on 23%.
Samsung maintains this new market positioning by consciously remaining in a state of “perpetual shake-up” and refusing to become complacent, as testament to this in 2015 Samsung was granted more US patents than any other company – including IBM, Google, Microsoft and Apple.
Here are the top five ways to disrupt yourself:
- Get comfortable with calculated risk.
Risk-taking is fundamental to growth. Without appropriate levels of risk-taking, we will become less and less relevant. Late last year, during a news conference to announce Nokia being acquired by Microsoft, the Nokia Chief Executive ended his speech saying “We didn’t do anything wrong, but somehow, we lost.” Perhaps Nolia should have done more “wrong things.” Fear of failing, or of doing “the wrong thing” needs to be replaced with a hunger for trying new things and accepting that many of them may fail but some will succeed spectacularly.
- Stop looking at your competitors.
If the past five years have taught us anything it is that competition can come from the most unlikely places. Shadow boxing your “potential” competitors is a certain way to not only get things wrong but to distract from the most fundamental roadblock to innovation – ourselves.
- Stay open to partnership.
Companies rarely invest into core invention R&D, nor should they. Most corporate innovation comes from a partnership between existing capabilities and someone else’s.
- Innovate from the top-down and the bottom-up.
Experienced innovators are in great demand globally and can pick and choose where they work. They will not be attracted to a workplace where innovation is siloed or considered a token commitment.
- Invest in innovation.
Embarking on an innovation drive with decades old technology infrastructure is not ideal. What plans do you have for properly developing, testing and refining any new products and services on current and future customers? There is truth to the adage “innovate or die”. As legendary businessman Jack Welch put it “If the rate of change outside your organization is greater than the rate of change inside your organization, the end is in sight”. However, we should be more focused on the rewards and opportunities from innovation. Innovation has a much greater chance of success when it stems from a deeply embedded culture of innovation with a long-term view in mind siloed rather than a knee-jerk reaction to change or disruption.
The above article by Peter Bradd was published in the Financial Review with some great tips on how to avoid becoming complacent in your business.
Phil Nolis CPA Dip FS (FP) –