With technological advancements bringing a rapid pace of change, most businesses need to look for new ways to drive revenue. But with an almost endless amount of choice, deciding what to do can be tough. And once you’ve overcome that hurdle, the next challenge is figuring out how to do it.
Last year, we explored some of the different approaches organisations have been taking to innovation.
Here, we summarise the pros and cons of four key approaches.
The Fast Follower Approach
The Fast Follower approach allows organisations to avoid the mistakes of others before them - the First Movers - and then adopt best practice for a customer community already familiar with the innovative changes.
|Low risk - avoid the “trip hazards” that the First Mover experiences||No room for error - Fast Followers need to deliver a more complete solution as consumers will be less forgiving of errors|
|Take advantage of the First Mover’s learnings and mistakes||Need to take into account a constantly changing market|
|Don’t need to spend time educating customers on the product||If you are not ready to act quickly, it’s likely someone else will and you will lose out on the opportunity|
|The demand is already there||If the Fast Mover succeeds, once consumers are on board with a new product, getting them to switch can be challenging|
|Take advantage of the market opportunity created by the First Mover|
Start-up Incubator Approach
Start-up incubators are designed specifically to help companies in their very early infancy. They serve as a great platform for helping entrepreneurs to build the foundations of their business; from idea and product development to finding follow-on investors.
|Helps get start-up businesses off the ground||Not all incubators offer the same benefits - finding one that will deliver advice and guidance is important|
|Offers benefits such as seed funding, legal guidance and accounting assistance||Some incubators are a business, meaning they will have their own interests which may not be aligned with yours|
|Frees up start-ups to focus more on the core business||If there is no clearly defined structure or expectations, programmes have the potential to drift or stagnate|
|Offers work space at a lower-than-market rate for members||An incubator acts as a boss of sorts - meaning you have someone to answer to or provide information as required|
|Often provide mentoring and training schemes||The application process can be tough|
|Can join for an indefinite amount of time, allowing access to support for as long as needed|
|Offers a collaborative environment where start-ups can learn from other's successes and mistakes|
|Opportunity to tap into a large network of potential business partners|
The term ‘Innovation Hub’ is used quite loosely, but broadly refers to a fluid space where an organisation can experiment with new, even radical ideas in the hope of inspiring change or new opportunities that could enhance their business.
|Helps jump-start innovations||Not a long-term solution|
|Offers a safe environment where taking risks and pushing boundaries is encouraged||Needs to be led by someone with the ability to drive focus on creativity, priorities, and outcomes|
|Gives momentum and a structure for nurturing an initial idea into a tangible and robust solution||Can be challenging to get all people in the right place at the right time|
|Brings together multiple cross-functional teams who are able to create potentially disruptive solutions that may have otherwise not evolved||Requires high levels of engagement from employees once the innovation is introduced into the organisation|
Outsourcing to a Third-Party Consultancy
Some organisations choose to hire a third-party consultancy for innovation projects. The consultancy builds a methodology and applies it to the organisation.
|Offers crucial subject matter expertise that doesn’t exist within the organisation, e.g. AI||Often come with a ‘one-size-fits-all’ approach which may not be suitable|
|Offers a fresh perspective as an independent party||Senior experts may be involved at the start, but often consulting firms will deploy recent graduates with little practical experience into delivery roles|
|Provides economy of scale||Knowledge enters and leaves with the consultancy - it doesn’t become embedded within the organisation|
Which is the best approach?
Often, the best approach for a business will depend on what it is they want to do. For a company looking to invest in AI, a third-party consultancy may be the most appropriate solution so they can take advantage of the consultancy’s extensive subject matter and economy of scale.
If a company is looking to bring a product to market in a new area, they could benefit from an innovation hub that will allow them to experiment with different ideas in a safe and controlled environment. Or for start-up companies, an incubator that provides valuable support and advice could be a better option. But if a company is looking to take advantage of a market where there is already some demand, then they could find success as a Fast Follower.
Have you considered how innovative your organisation currently is? Take our Innovation Healthcheck to find out.