Over the past 30 years or so companies have sought to outpace their peers by adopting a host of new approaches to improve their strike rate on innovation and deliver growth. Some of these have come from academic analysis and others have simply migrated from one company to another as best practice. Here we highlight those explored in more detail in the Growth Champions book.
Five approaches – core competence thinking, multifunctional teams, stage-gate processes, customer insight, and technology licensing – were the battlegrounds for a lot of growth platform successes for a good few years. At the start of the 1990s everyone was keen to develop these capabilities within the organization.
By 2000 pretty much every major company had effectively achieved this and so, in essence, they all became ‘hygiene factors’ – things that had to be done in order to meet the same standards as everyone else but actually didn’t make them different. To further improve innovation and growth performance, companies had to look for new sources of potential differentiation in their ability to grow.
In the last decade, few would argue that the biggest driver of change in terms of how companies innovate, access new markets, interact with new audiences, create new channels, and so deliver growth has been the internet. The scale and scope of how increased access to better information can deliver step-changes in efficiency has been breathtaking.
Alongside the impact of the internet, and in some cases enabled by it, open innovation, smart M&A, customer engagement, strategic collaboration, and foresight are clearly where the action is right now and are the areas where organizations believe they can gain competitive advantage over their peers. However, in sectors such as fast-moving consumer goods (FMCG), consumer electronics and telecommunications, some would say that these approaches are, like the initiatives of the 1990s, fast becoming hygiene factors themselves and will soon evolve into necessary business commodities. We are not there quite yet but these five approaches may soon become the status quo for all.