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Harnessing the Power of Innovation and Business Growth for Profit

Updated: Jun 11, 2023


Shayo Imologome Guest Speaker, Harnessing the Power of Innovation

This is a presentation I gave at the above event on LinkedIn, in March 2023.


Good evening, LinkedIn Family, first of all I’d like to say thank you to Mathew Ubong for this invitation. I think the initiative of an "Hour with a Manager" is really relevant at this time because there is so much going on in the corporate space, and these discussions provide a platform to explore different perspectives from seasoned industry leaders. Thank you very much for the opportunity.


So let me get straight into it. The topic for today is Harnessing the power of innovation and business growth for profit. And I will give a brief background on what innovation and disruption is with 3 real life examples, and then I will give some tips on how we can be effective in our innovative activities.


First let me start with a quote.


When the winds of change blow, will you build a wall, or will you build a windmill?


Those who build a wall try to prevent change, but those who build a windmill, leverage on that change and use it to their benefit and advantage.


There is no way we will talk about innovation and business growth without talking about disruption. Innovation and disruption are two sides of the same coin, and they are critical for driving business growth.


In today's fast-paced world, it's becoming increasingly important for businesses to innovate and disrupt to remain competitive. I will start by giving a brief background.


Business disruption refers to any innovation within an industry that radically and lastingly changes the way all companies in that industry operate. The key words here being radically and lastingly.


Disruptive innovation on the other hand is the process in which a smaller company, is able to challenge an established business (an “incumbent”) by entering at the bottom of the market and continuing to move up-market.


Like I said earlier disruption and innovation are two sides of the same coin, and there are three major types of innovation. Without getting too technical, I’ll just give a quick summary.


So we have

1. Sustaining Innovation,

2. Low end disruption

3. New market disruption and


Technically speaking a company can be disrupted by an external force, which could be by a company, technology or changing industry trends, or it can disrupt itself internally, and we will see that a bit later on.

So back to our explanation of the types of disruption, and I’ll use an example of the global smartphone industry to explain it. If we look at how the smartphone industry has evolved from around 2010 to date we will see just how much innovation and disruption has impacted the players.


In 2010 the market leader was Nokia with about 40% market share closely followed by Apple with 27% and Blackberry with 21%. So back in 2010, where were you? Where you with Nokia, BlackBerry or Apple? How many of us can even remember? Samsung at that time was just a newbie with a tiny share of 4%, while the total industry sales globally was just 297m units.


But fast track to 2022, the market had increased in size to 1.4b units, so who were the new key players?


Apple was still going strong maintaining its market share of 27%. And I’ll talk about the other players later, but let me stay with Apple. How did Apple manage to sustain itself? From 2010 to 2022 staying strong with a market share of 27%? It applied a sustaining innovative strategy. Simply put this is when a company creates better-performing products to sell for higher profits to its best customers. Its providing premium products to high end consumers at premium prices. With each new edition of the iphone, Apple improved the quality and the features.


Typically, sustaining innovation is a strategy used by companies already successful in their industries. And Apple was already successful back in 2010. By doing this Apple was able to pursue ever-higher profit margins, and that is why Apple is such a huge success.


Now let's move back to the other players in the industry- what happened to Nokia and Blackberry, in 2010 these were market leaders, but by 2022, both had more or less been “kicked out” of the smartphone industry.


Blackberry was able to innovate and pivot into cyber security, but Nokia was not. And the then newbie Samsung, with only 4% in 2010, grew to be a major Apple competitor by 2022 with 28% market share.


So, what happened to these players – Disruption.


And the inability of Nokia and Blackberry to quickly respond and innovate led to their exit.


Samsung came into the market using a Low end disruptive strategy. Here a company uses a low-cost business model to enter at the bottom of an existing/overserved market and claim a segment. It offers a lower-priced product with acceptable performance, ultimately capturing its competitors' customers.


So, consumers who liked Apple products, the iPhone, but don’t really need all the great features, they need something simple but still looks as great as an iPhone, for much less the price are happy to buy Samsung products. The trick with this type of innovation is that the new company gradually improves on its products slowly moving upmarket to challenge the incumbents – which in this case is Apple. Today, Samsung has premium products that are competing with the iPhone.


Now I’m going to quickly talk about New Market Disruption. There were some new players in 2022 who did not exist back in 2010, eg Xiaomi Huawei and Oppo, etc. how did they do it? With new market disruption a company creates/claims a new segment in an existing market by catering to an un-served customer base, slowly improving in quality until incumbent businesses' products are obsolete. Simply put they catered for people who could not even afford a phone at the time.


These consumers just needed a considerably basic, simple low priced functional budget phone, to take selfies with and be on social media. And that is what these companies did, provided a budget phone, less durable maybe, but it got the job done. But these companies are not standing still, they also have premium versions and are climbing up market to challenge Samsung.


Now this is a typical example of how innovation leads to disruption, leads to business growth, and ultimately leads to profits and changes the entire landscape of an industry.


Still talking about Innovation and disruption, another great example would be how Netflix revolutionized the way we consume movies. Once upon a time, we were all renting DVDs, but Netflix changed that by introducing a subscription-based model for renting DVDs through the mail, (at least for people in the US). So rather than go to the rental store, customers could order online and have the DVD’’s delivered by mail.


Netflix more or less disrupted itself. So, from DVD rental-by-mail service, it recognized the shift in consumer behaviour toward online streaming and made the bold decision to pivot its business model and provide a streaming service.


And Netflix continues to disrupt itself, so today they are investing heavily in original content production, which is a departure from licensing content from other studios. They realized that they needed to control the narrative and provide an exclusive offering. What happens if they can't get content from other studios or if the studios charge too much? They won't have a business, so the solution was to develop their own content.


Netflix has not stopped innovating, its disrupting again. If we look at the trajectory of how the company has evolved, starting with DVD by Mail, then it moved to streaming, from there to the development of its own content and the next move is to go into gaming. So we can see how they keep disrupting themselves and remain on the cutting edge of innovation and ultimately ahead of the industry.


And yet a third example is AI – we are all familiar with the ongoing conversation about Chat GPT and how it is posing a threat to Google Search. I did a post a few days ago on LinkedIn exploring how Google responded. Google has some kind of collaboration allowing Chat GPT to put an extension on Chrome, so now you can put Google search and chat GPT side by side and compare search results.


I have given 3 examples of how innovation affects industries and their players, and how important it is to keep innovating to sustain business growth. I will wrap up by sharing a few tips on how to be more innovative and disruptive in your business.


1. Invest in research and development – you need to set funds aside to do this, don’t see it as a waste, one breakthrough can change the game forever.


2. Be open to new ideas. Don't be afraid to listen to new ideas, even if they seem crazy. Some of the best ideas come from the most unexpected places.


3. Be willing to experiment, be willing to fail. Don't be afraid to try new things, even if you're not sure if they'll work. The only way to know if an idea is good is to try it. Failure is a part of innovation. If you're not failing, you're not innovating. Embrace failure as an opportunity to learn and grow.


4. Be patient. Innovation and disruption take time. Don't expect to see results overnight. Be patient and persistent, and eventually you will achieve your goals.


5. Be flexible and open to change. Businesses need to be willing to change their products, services, and ways of doing things in order to stay ahead of the curve.


6. Be willing to take risks. But let them be calculated ones.


7. Leverage on technology. Explore how you can work smarter, not harder, how you can increase efficieincy and llower your cost, tech will do that for you.


8. Think collaboration. Who can you partner with.


9. Keep your business agile - What is Agile? In project management, the agile methodology ensures that a project runs with flexibility, collaboration, and rapid iteration. It works with emphasis on continuous feedback and improvement. Which means things can easily and speedily change if they need to. Keep your business nimble and agile so you can quickly and effectively respond to changes as they occur.


9. Be prepared for disruption. Disruption is certain, it is a question of when not if. Be prepared. Better still, disrupt yourself.


I will close with my quote;


When the winds of change blow, will you build a wall, or will you build a windmill?

I encourage you to build a windmill.

Thank you


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Has this been helpful?


Please feel free to like and share and always remember -

inspire, influence, and impact your world.

_________________


Written by Lady Shayo Imologome

Business Growth Strategist, Management Consultant, and Keynote Speaker

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