Your Chief Innovation Officer
The Biggest Threat to Successful Companies is Innovation.
The Biggest Threat for Startups is in not getting Traction.
We are the bridge between the two.
We help companies identify, vet and incorporate innovation into their organizations. Our cross-functional support helps existing managers and executives leverage their existing platforms and potential while minimizing the often fatal threat that innovation increasingly poses to established companies.
Group Decisions are Difficult
Successful Businesses Fail Due to a Lack of Innovation
Successful businesses do not embrace innovation well.
They are busy executing on what works. And their existing momentum and status quo create severe structural impediments to embracing innovation.
With their more complex organizational structure and specialized division of labor, the typical B2B purchase now requires an average of 7 approvals within an organization. According to the Harvard Business Review, a decision that had an 81% chance of approval in a group of one, has only a 31% chance of approval in a committee of six.
As a result, organizations are likely to miss out on opportunities simply because it is easier to not make a decision than to continue doing what is already being done.
Early Adopters are Few
Successful Businesses Don't See Emerging Threats
Not only do established businesses often fail to capitalize on opportunities because of the difficulty of making decisions, but many times, they are not even aware of an opportunity. Busy with attending to their day to day obligations, they may remain oblivious to very strong existing threats to their business, including those that already have substantial traction in the marketplace.
For example, in a recent survey, a majority of senior executives in financial services sector had never even heard of some of the industry's leading billion dollar venture backed financial services companies that were quickly taking over market share from their traditional businesses (see graph). As you can see, within the startup community, many of these companies are veritable celebrities, and fast growing consumer favorites. Among the entrenched establishment, they often remain completely unknown.
This survey is not an isolated example. There are thousands. Here are just a few:
1. Bessemer Venture Partners passes up on opportunity to invest in FedEx – 7 times.
2. International Car Makers Refuse to Buy Volkswagen in Wake of WWII (1945)
3. Enzo Ferrari Refused to Listen to Ferruccio Lamborghini (1958)
4. Kodak Invents the Digital WiFi Camera But Doesn’t Exploit It (1975)
5. Ross Perot Refuses to Buy Into Microsoft for $60 million (1979)
6. Marvel Decided Not to Buy Out DC comics (1984)
7. Digital Research passes on opportunity to develop OS system for IBM. Startup Microsoft does so instead. (1985)
8. Excite.com Refuses to Google for $1 million (willing to buy for only $750 thousand).
9. Blockbuster Refuses to Buy Netflix for $50 million (2000); later worth $20 billion.
10. MySpace Rejected Facebook’s Original Purchase Price (2005) when Zuckerberg requests $75 million.
Established Executives Are Unaware
Innovation is a Cheap Risk Management Strategy
The rate of innovation is only increasing.
Even among the Fortune 500, the turnover is only increasing. Even with their immense reserves of cash, worldwide name recognition, and entrenched distribution systems, the world's largest companies continue to come and go.
Given this fact, the examples cited above are not just cute stories of missed opportunitites. They are issues that determine the fate and fortune of entire companies and industries. They demonstrate the truth of the aphorism that 'the biggest risk is taking none at all'.
Since established companies specifically, and even human nature generally, are naturally risk adverse, the question becomes how to proactively embrace innovation without upset what is currently working or without taking on undue internal risk.
That is where we come in.
What We Do
Upstart companies typically suffer from the opposite problem of established companies. They lack strong distribution systems and brand or name recognition. To be successful, they often need to be orders of magnitude better than the status quo.
Thus the paradox that the largest threat for innovative companies is their lack of the very asset that becomes the stumbling block for large successful companies.
Our service bridges this chasm by acting as the chief Innovation officer for successful growing companies.
We help existing managers and executives identify, vet and embrace innovation within the needs and resources of a company. By focusing exclusively on innovation in the context of your company, you are able to stay abreast of relevant trends and developments without distracting you from what is currently working. At the same time you are able to stay attuned to opportunities in a way that you can capitalize on them, rather than be defeated by them.
Our cross functional assistance helps overcome the structural difficulties to adopting innovation that is present in most organizations without disrupting current momentum or company focus. By focusing on relevant trends in a sensitive way, attuned to your company culture and resources your company's success and resources can represent a platform to leverage, rather than a stumbling block to growth.and future competitiveness.
Our services are geared to helping your existing team evaluate and implement new opportunities and technologies without distracting them unduly from their current responsibilities, while helping take cross-functional or cross-department ownership of implementation.
Businesses Can Successfully Use Their Current Platform for Even Greater Success
While a lot of romance exists around startups and innovations, it is the established business that have the advantages in terms of brand, distribution networks and other barriers to entry. It is because of their lack of proper innovation management that these formidable advantages are lost.
However, companies that manage innovation well are able to continue to achieve considerable success. Following is a small sample of companies that found even greater success by adopting new productrs or services.
Originally: MillLater: Land Developer
Originally: Pulp MillLater: Consumer Electronics
Originally: PlowsLater: Tractors
Originally: SoapLater: Toothpaste, consumer products
Originally: Textile RemnantsLater: Toys
Originally: Business Model unknownLater: Leading Advertiser
Originally: MillLater: Conglomerate
Originally: Video GamesLater: 52nd Game Became a Hit (Angry Birds)
Originally: BooksLater: Cosmetics
Originally: RailroadLater: Australian Theatre Chain
Originally: StationaryLater: Jewelry
Originally: Mineral SalesLater: Adhesives & Office Supplies
"Fortune 500 Firms: 1955-2014: 89% Are Gone and We're All Better Off", American Enterprise Institute.
"Making the Consensus Sale," Harvard Business Review.
"Corporate Venture Capital: Avoid the Risk, Miss the Rewards, The Boston Consulting Group.
"Fintech Startup Awareness Chart," www.visualcapitalist.com.
"Why B2B Companies Struggle with Collaborative Innovation, Harvard Business Review, March 26, 2016.