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Discipline of Innovation
muganda
#1 Posted : Wednesday, September 08, 2010 1:23:28 PM
Rank: Elder


Joined: 9/15/2006
Posts: 3,905
It's a difficult time for business. You've seen EABL and Changaa debacle; what of Safaricom vs Zain vs Others. So the question all strategists must be asking is where is the answer.

I chose to look at Peter Drucker who aeons ago penned the Discpline of Innovation. In brief innovation arises from the following sources (with some overlap):

Opportunity within company/industry
1. Unexpected occurences: Ushahidi

2. Incongruencies: Equity, Vuka

3. Process needs: MPESA, Online banking, iTunes

4. Industry and Market changes: Fibre cables, Digital TV


Outside a company/industry
5. Demographic Changes: Alvaro, Bankika

6. Changes in Perception: Health Foods, Local is better (Jua Cali/CitizenTV)

7. New Knowledge: Ethanol production (Mumias)


http://www.referenceforb.../Gr-Int/Innovation.html

Just thoughts...any examples of where other innovations lie in the matrix? smile

Elder
#2 Posted : Wednesday, September 08, 2010 2:38:51 PM
Rank: Elder


Joined: 9/7/2010
Posts: 2,148
Location: elderville
muganda wrote:
It's a difficult time for business. You've seen EABL and Changaa debacle; what of Safaricom vs Zain vs Others. So the question all strategists must be asking is where is the answer.

I chose to look at Peter Drucker who aeons ago penned the Discpline of Innovation. In brief innovation arises from the following sources (with some overlap):

Opportunity within company/industry
1. Unexpected occurences: Ushahidi

2. Incongruencies: Equity, Vuka

3. Process needs: MPESA, Online banking, iTunes

4. Industry and Market changes: Fibre cables, Digital TV


Outside a company/industry
5. Demographic Changes: Alvaro, Bankika

6. Changes in Perception: Health Foods, Local is better (Jua Cali/CitizenTV)

7. New Knowledge: Ethanol production (Mumias)


http://www.referenceforb.../Gr-Int/Innovation.html

Just thoughts...any examples of where other innovations lie in the matrix? smile



This is too deep. Move it to the Thinkers Room first.
He who can express in words the ardour of his love, has but little love to express. - Petrach, Son. (That men by various ways arrive at the same end. - Montaigne, The Essays of.)
muganda
#3 Posted : Wednesday, September 08, 2010 4:26:24 PM
Rank: Elder


Joined: 9/15/2006
Posts: 3,905
@Elder, toooo deeep, for who, couldn't be, then who? I beg to differ.

Idea is simple! Many times it seems like only a genius can come up with the next new idea. But no, it's only these 7 factors at work; and once you focus, look out, and work hard on these factors, then the biggest headache for businesses is easy as pie.

1. I'd argue Nakumatt was an unexpected occurence. Who knew that concept of hypermarkets would really pick?

2. I'd further say Aga Khan University Hospital was good innovation to address incongruency of only one teaching hospital in Kenya.

3. What about KAPS and their automated car parks, isn't that a clear example of innovation stemming from a process need?

4. Or the recent creation of Squad Digital - Scangroup's digital unit - on the back of Industry and Market requirements relating to Internet in Kenya.


5. Ditto: Zain's Club 20 to cater for growing youth demographic need to access mobile phones.

6. Ditto: Montezuma Funeral Homes as a result of change in perception as to what constitutes a loving send-off.

7. Ditto: Suraya properties and concept home projects as a result of new knowledge on financing options


muganda
#4 Posted : Thursday, September 09, 2010 3:32:09 PM
Rank: Elder


Joined: 9/15/2006
Posts: 3,905
Ooops @Elder, I humbly accept I put my foot in my mouth! I just thought to share on the origin of innovation - new ideas, but alas, I speak to only myself.
Elder wrote:
This is too deep. Move it to the Thinkers Room first.


Hope the Discpline of Innovation was some help to my fellow Wazuans and may one day help someone find a breakthrough idea. To close, I thought to share on the Classic Innovation Traps by Elizabeth Moss Kanter.

The Idea in Brief
Most companies fuel growth by creating new products and services. Yet too many firms repeat the same growth-sapping mistakes in their efforts to innovate.

For example, some companies adopt the wrong strategy: investing only in ideas they think will become blockbusters. Result? Small ideas that could have generated big profits get rejected. For years, Time, Inc. didn't develop new publications: managers wanted any start-up to succeed on the same scale as the enormously popular People magazine. Only after Time decided to gamble on a large number of new publications did revenues rise.

Other companies err on the side of process-strangling innovations by subjecting them to the strict performance criteria their existing businesses must follow. At AlliedSignal, new Internet-based products and services had to satisfy the same financial metrics as established businesses. Budgets contained no funds for investment--so managers working on innovations had to find their own funding. The consequences? Retrofitted versions of old ideas.

To avoid such traps, Kanter advocates applying lessons from past failures to your innovation efforts. For instance, augment potential "big bets" with promising midrange ideas and incremental innovations. And add flexibility to your innovation planning, budgeting, and reviews.

Your reward? Better odds that the new ideas percolating in your company today will score profitable successes in the market tomorrow.


1. Strategy Mistakes
• Rejecting opportunities that at first glance appear too small.
• Assuming that only new products count--not new services or improved processes.
• Launching too many minor product extensions that confuse customers and increase internal complexity.

2. Process Mistakes
• Strangling innovation with the same tight planning, budgeting, and reviews applied to existing businesses.
• Rewarding managers for doing only what they committed to do--and discouraging them from making changes as circumstances warrant.

3. Structure Mistakes
• Isolating fledgling and established enterprises in separate silos.
• Creating two classes of corporate citizens--those who have all the fun (innovators) and those who must make the money (mainstream business managers).

4. Skills Mistakes
• Allowing innovators to rotate out of teams so quickly that team chemistry can't gel.
• Assuming that innovation teams should be led by the best technical people.

Sasha
#5 Posted : Tuesday, December 21, 2010 11:29:09 AM
Rank: Veteran


Joined: 9/5/2007
Posts: 627
@muganda: Good stuff. I agree with you in principle on most of your points.

I would however argue that Nakumatt was not an unexpected occurence, rather it was a process need. True, no one knew that hypermarkets would pick up, but the way businesses were offering 'all in one' packages, Nakumatt needed to innovate to also locate themselves where customers could access all other services they required while shopping and vice-versa.

I'm also not too sure about Alvaro and Bankika being in the opportunities outside company/industry segment. They are ideally in the same company and within the same industry. These two, IMO, would be more suitable in the process need segment.
Intelligentsia
#6 Posted : Tuesday, December 21, 2010 4:40:51 PM
Rank: Elder


Joined: 10/1/2009
Posts: 2,436
why do I believe Alvaro's introduction in the market was more experimental than strategic really - it was never meant to be launched in the Kenyan market initially only that EABL's G.Mahinda took the bull by the horns and said he was ready for the challenge of selling it successfully in kenya. it nonetheless went ahead to become a runaway success, kudos to a well-orchestrated marketing campaign that saw it leave non-alcoholic drinks like PICANA far behind. To me the main success story about Alvaro is its aggressive marketing such that within so short a period it was the talk of the each joint.
muganda
#7 Posted : Tuesday, December 21, 2010 5:33:50 PM
Rank: Elder


Joined: 9/15/2006
Posts: 3,905
@Sasha, happy hols smile This one was lost in the archives. You are right on your assertions.

On Nakumatt:
Did it become successful because people found it impossible to do all their shopping (groceries, furniture, paint, cars) in one place?
Did Uchumi initially disregard or dismiss the idea of a hypermarket - very large shop - where everything is found in one place?

My thinking: What most people frequently buy in Nakumatt was found in Uchumis even before hypermarts. I wonder whether Nakumatt's early shops in Nakuru were hypermart?

Perhaps the unexpected occurence was the large space, buzz, ambience, go-out experience of finding everything under one roof. This even took Uchumi by surprise.


On Alvaro, Bankika:
I agree with @Intelligensia; the whole idea of innovation is experimental. But it is common knowledge that EABL had for long tried to venture outside their 'drinkers' stable. Even Malta Guinness, launched some time earlier, was a step in this direction. Non-drinkers constituted a new and larger demographic.

Same case with Bankika, which heralded a new shift by KCB not to Children's accounts but to a new emergent empowered demographic of youth. I've since seen no less than 4 other banks follow this segment.
VituVingiSana
#8 Posted : Tuesday, December 21, 2010 11:32:50 PM
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Joined: 1/3/2007
Posts: 18,137
Location: Nairobi
Uchumi had a hypermart ages ago! It was known as Uchumi Hypermart!
Greedy when others are fearful. Very fearful when others are greedy - to paraphrase Warren Buffett
Sasha
#9 Posted : Wednesday, December 22, 2010 8:24:45 AM
Rank: Veteran


Joined: 9/5/2007
Posts: 627
@Intelligentsia & muganda: Happy holidays to you too!

All innovation is experimental. It is the willingness to support creativity and experimentation to venture beyond the current state of affairs! Like VVS correctly says, Uchumi had hypermarts long before Nakumatt thought about it. What Nakumatt did is to venture beyond the state of affairs created by Uchumi. Creativity is not innovation. Allow me to give you a few examples:

1. The Swiss were the world leaders in the watch industry in 1968. They invented the electronic watch but it was rejected by all other Swiss watch makers. Seiko took one look at the watch and are now the world leaders in electronic watches.
2. Univac invented the first computer but refused to answer queries from businessmen about it because they invented it for scientists only. IBM took a look at it and the rest is history.
3. Phillip Reis invented a machine that could transmit music in 1861. The Germans convinced him this invention was useless because the telegraph was 'efficient'. Alexander Graham Bell became a multimillionaire for operationalising the telephone with the same Germans as his main customers.

Basically, innovation must be accompanied by experimentation to be successful!

Nakumatt took the idea of hypermarts to another dimension and backed it up with aggressive marketing strategies. Uchumi were just happy to lump everything in one big space and allow customers to wade through looking for what they needed!

On Alvaro and Bankika, the concept employed here has been highlighted by Igor Ansoff in the Ansoff Growth Matrix. It basically identifies alternative growth strategies for corporate entities based on products and markets. Alvaro and Bankika were new products being introduced into existing markets in a strategy Ansoff named Product Development. It is very suitable for industries that have a lot of competition and low market spread!
msotoville
#10 Posted : Thursday, December 23, 2010 1:50:24 PM
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Joined: 4/14/2010
Posts: 183
Location: Nairobi
@ Muganda & All!
Lovely thread, people! Really changamsha'd the old oblangata, and delivered some valuable lessons for 2011!

My ka-small contribution to the discussion:

Considering Kenya is the largest non-mineral rich economy in Sub-Saharan Africa, innovation should be our blueprint for development.

Kenya's economy is about 70% agrarian - we happily ship out raw materials for a song to charlatans and sharks up north.
Perhaps if we were to turn the innovation spotlight onto this sector, we would realise humongous gains that would silence that militant midget Rannenburger, and his motley crew of nay-saying diplomatic blabbermouths!

All the innovation examples given are MME/SME', with the exception of Suraya and Montezuma. Perhaps the spotlight should be shone further down the food chain to the Micro and Small Enterprises, the dudes who faithfully deliver approximately 390,000 new jobs per year to the Kenyan Economy.
So nice that its nasty, so bangin' its busting,
So slick that its sick, so dope its disgusting!
Sasha
#11 Posted : Tuesday, January 04, 2011 10:32:58 AM
Rank: Veteran


Joined: 9/5/2007
Posts: 627
Very true msotoville! You would be shocked to know that most of these ideas were actually conceived at the Micro & Small Enterprise level.

The most disappointing thing in Kenya is that companies are not willing to give extremely bright employees space and resources to innovate. Many of the world's most successful brands have come from internal innovation that has been supported from within! Simple examples from Kenya that have become cash cows include M-kesho (developed by an Equity employee), Alvaro, Equity's Mimi ni member campaign (idea came from a manager at Equity) among others!

If only employees can be given management support and resources coupled with incentives to innovate business procedures and products, we can see a revolution in this country. The inventions I used to see at the usual annual science congress (I wonder whether it still exists) were dumbfounding! I believe that creative genius can be nurtured and exploited!
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