Necessity, has become the mother of innovation. Now more than ever, companies need to innovate in order to survive. Today, the threat of new technologies, evolving customer expectations, and new entrants such as Tech Giants, have been the most notable factor in motivating companies to engage in innovation. These immediate threats, have been the catalyst to a number of disruptive solutions; some of which, have changed industries significantly. Yet, this is a reactive approach to innovation that is only a temporary fix. Contrary to popular belief, innovation will not solve all of your organization’s problems. Rather, the innovative solutions that your organization uses today, are not the answer to the problems that you will face tomorrow. Below, we continue to debunk this myth of innovation.
Internal vs. External Innovation
In order to successfully innovate internally, a company needs to have a strong understanding of the external ecosystem. Whether it is the introduction of new technologies, changing customer expectations, or legislative changes, the external environment that a company competes within is constantly evolving. In order for a company to stay ahead, therefore, it is important that they stay informed. An organization’s innovation strategy, needs to keep the changing external ecosystem in mind in order to stay effective. The innovative solution that may work for an organization one day, maybe obsolete the next day. The FinTech ecosystem, is a unique opportunity for how organizations can have a better pulse on how the external ecosystem is evolving. By leveraging FinTech’s’s deep understanding of the customer, customer behaviour, and disruptive technologies, an organization’s innovation strategies can effectively address the changing market.
The Power of Partnerships
The notion that innovation will fix every problem that an organization may have, is a critical misunderstanding of innovation. Today, new technologies, changing customer needs and expectations, and disruptive business models, are drastically impacting industries. Choosing to innovate, or adapting one’s innovation strategies, have now become a necessity for an organization’s continued success. A companies innovation strategy, therefore, constantly needs to be reviewed and altered in order to effectively solve not only the issues of today, but the problems of the future. Understanding the customer and their behaviour, for instance, will be critical in ensuring that an organization’s innovation strategy is effective. The growing strength of the FinTech ecosystem specifically, is an indicator of their unique understanding of today’s customers and their behaviour. By bringing incumbents and the ecosystem together through partnerships, for instance, organizations can get a pulse on potential areas of disruption. Through leveraging the FinTech ecosystem as well as strategic insights, organizations can continuously deliver products and services that transform their business, and that help to create true value for their customers.
Be an Innovator, Not a Problem Solver
The innovation strategies used to solve the problems of today, can be seen as a reactive approach to innovation – or problem-solving. Yet, the issues that a company may solve for today, will most likely be completely different from the threats that they will face in the future, and even the near future. Things are moving so fast, so “modernization” or “transformation” efforts focussed on catching up vs running ahead, will potentially be failed business cases. As customers, technology and competition change, so will a company’s innovation strategies. Innovation, therefore, is not a one time fix. Successful innovation requires organizations to not only address today’s problems, but to also look forward and recognize risks that lie in the future. Although organizations may feel less urgency to address potential risks, the innovation strategies that are leveraged today may not be effective in moving into the future. A distinguishing factor of innovators is that they look to the future in order to plan ahead, and address risks before they become problems. Innovators understand the need to leverage strategic data and insights, in order to fuel their innovation strategies; creating disruptive products, strategies, and business models that deliver the future today. Yet, disruption is usually the catalyst for further disruption within an industry. Telecommunications companies such as Rogers and Bell, for instance, have been disrupted by Netflix’s innovative streaming service offering. Netflix provided a unique digital experience to customers, that allowed individuals to watch their favourite shows and movies on the go. Today, the threat of new streaming services offered by entertainment companies such as HBO, Crave and even Disney, have further disrupted the entertainment industry. This example, is not an isolated incident. Across industries today, organizations are continuously being faced with disruption. In order to survive, therefore, companies will need to be innovators and not problem solvers. And also realize new competition can come from anywhere.
To learn more about how we help innovators succeed, check out our podcast The Disrupticons where we share stories with innovators and why it matters.