Provocative Propositions

In the hyperactive and challenging world in which we all live, it is becoming harder and harder for business leaders to find time to read, reflect and gain insight from the many valuable sources at our disposal.

In "Provocative Propositions", The Beacon Group attempts to fill that void by offering our opinion, often rather pointed, on a wide array of issues we believe are relevant to leading a modern organization.

The articles are catalogued into 12 categories so you can quickly and easily find a topic of particular interest. We then offer three easy steps under the heading "In Our Opinion" to help business leaders take action on the key themes.

Simply click on the category and read away.

Sustainable Innovation
Imagine a company that sends its managers to live with consumers in their homes for days on end to see how its products are used by families.

Imagine a company where managers join frontline employees in stores to sell their products alongside their staff to see what items are duds and what grabs the interest of consumers.

This isn't a strategy from an idealistic business school book...

That's exactly what innovation leader Procter & Gamble does to better understand its consumers.

What else do they do?

Over 50% of their innovation comes from outside sources - customers, ideas from other industries, even their competitors feed them a steady stream of creative products.

It's made them a game-changer in their industry under the helm of former CEO A.G. Lafley, who also happens to be the author of the book "The Game Changer".

The Fact is innovation is one of the most difficult tricks to get right in a business.

The Problem is that innovation strategies are an afterthought in most companies. New ideas come from the inside and aren't tied to the consumer – the person actually using your products!

The Outcome is either fast-paced product launches that overwhelm a market with poor execution, as was the case with Procter & Gamble earlier this decade... or... companies face the dreaded C-word – their products get commoditized.

The Solution is to make innovation a core component of your business - before even thinking about products and markets. Every business has to understand how to consistently deliver innovation organically.

Innovation as an Integrated Management Process

When you bring up the topic of innovation, most managers think of new products, new services and new customers with different needs.

Innovation is expansive, most executives would argue.

But innovation is also about exploring what can be improved upon in your current product line. It isn't just about coming up with new ideas. For example, in 2000, P&G was launching too many products too quickly and letting execution suffer. Employees were confusing sheer activity for innovation. The focus was on getting new ideas out the door, but not on examining how those new ideas actually improved customer service.

Acquisitions vs. Organic Innovation

Be careful not to confuse growth from acquisitions with basic organic innovation. A.G. Lafley and Ram Charan believe, quite simply: You can't buy your way to innovation.

Often, when companies can't innovate, they go out and buy a groundbreaking competitor. Their core product lines suffer and the buying organization spreads its uncreative culture to the smaller acquisitions.

Opening up to customers: What a shock!

And even if you get by with acquisitions for some time, it won't help you when you expand to overseas markets. Again, you'll have to put your customers first and truly understand the products that make their lives easier to be successful globally.

Today more than 50% of P&G's innovation comes from outside sources. When Lafley arrived in 2000, that number was only about 15%. When we say outside, we mean a lot of them come from customers.

LEGO invites its leading retailers to visit its headquarters and facilities once a year to discuss its upcoming products, exchange ideas and see each other's processes.

By the way, that brings up an interesting thought - does your company even have a system to track the source or value of innovation?

Your company must take all steps to remove the NIH syndrome - "Not Invented Here". Innovation doesn't have to come internally, and it's not a sign of corporate weakness when your best ideas come from the outside.

Don't think you've got all the answers...

In Our Opinion
The Beacon Group's Advice on becoming a Game Changer in your industry

Our three tips to drive sustainable innovation in your company.

Visit your neighbour - It's great to meet with your vendors and partners. It's even better to learn from your competitors. But how about walking down the street to your next door neighbour? The building beside you or the manufacturing plant down the street. Your new friend may be in a completely different industry, but the experience will open your eyes to a completely new set of practices. Who knows, some may even improve your business model. Make this a regular practice. Something we're calling Open Door Innovation.

Innovation as a production process - We encourage companies to look at innovation as a process that needs to be executed consistently. Products and solutions need to be "inputted" into your innovation process on a regular basis. They need to go through a series of improvements and come out in a more valuable state. Innovation means thinking outside the box, but implementing this goal is a remarkably disciplined process.

Innovation isn't always unsettling - Innovation doesn't have to come in the form of groundbreaking transformations, they can be incremental as well. It's advisable to have a group of people looking at incremental and groundbreaking innovation separately, while communicating together to examine opportunities to go from evolutionary to revolutionary. Think "small i" innovation.
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