“Without change, there is no innovation, creativity, or incentive for improvement. Those who initiate change will have a better opportunity to manage the change that is inevitable“William Pollard
Humans have been successful in achieving the first spot in the food chain over the course of history. One of their unique ability is to create virtual orders, which helps organize a wide-scale collaboration among its species. The created virtual order draws inspiration from nature. For example, An Organization is an assumed virtual order, which has come out of a desire to collaborate collectively. Drawing a comparison of a human body to an organization; In both cases, the principal goal is to allocate energy to pursuits. The expected return is more than compensates for the opportunity cost of using that energy. Doing so will lead to survival; not doing so always leads to death.
So to survive, Organizations need to invest in pursuit of producing future cash flows that create higher returns then cost of capital. Thus the goal is to achieve consistent and repeatable value creation. To remain relevant, it must address the changing requirements of its customers.
On the other side, customer needs are shifting at a continuous pace. This fundamental behavior is driving changes to jobs and relevant skills. The predictable change in the industry leads to new opportunities for the entire supply chain. These shifts become a womb for the creation of new offerings and transform existing ones as the expected changes as it progresses with time.
Ageless innovation is the outcome of a company’s ability to successfully pivot by “innovate, learn and refine.”
Each of such shifts demands innovation differently at its phases.
- Early Emergence Phase – Innovations based on functionality that focus on practically getting the job-to-be-done. The company will earn a premium for their services and products in this phase.
- Developing Growth Phase – In this phase, the priority shifts to higher quality and reliability. Customer experience and customer satisfaction become a differentiating factor. Focus shifts from technology innovation to process innovation. Companies focus on the refinement of manufacturing processes, service delivery models, customer experiences, quality assurance, technical support capabilities, and quality control.
- Maturity Phase – The customer needs shifts towards speed, convenience, and customization. The focus goes on how value is delivered. The demand is for the freedom and flexibility in ways of consuming the product or service.
Commoditization – Lastly, innovation meets most aspects of performance, reliability, and convenience. The market becomes commoditized, and the cost is the most critical.
To conclude, successful companies shift the base of competition, and their ability to change the basis of innovation keeps their offerings ageless. They start with the focus on performance and functionality through product innovations and shifts towards increasing reliability through process innovations. Eventually, innovating new business models that deliver convenience, speed, and personalized experience.
One can argue that the larger the organization, the harder it is to pivot due to the established business model. Start-up hence has an advantage over established organizations because they do not suffer from this problem. However, it needn’t be the case. The culture of seizing opportunities through a sustained business model innovation for transformation growth makes organizations ageless source of consistent and repeatable value creation.
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