Liliana Caimacan, Head of Global Innovation, Tata Global Beverages
The world around us is changing at an incredible pace. Digitization is impacting everything, how we live, work and play. At the same time, we see entry barriers to industry coming down. This has led to massive fragmentation of our markets and intense cost competition. All this in a world of uncertainty and inequality. At the same time, the current uncertain framework leads to more and more empowered humans’ taking over responsibility and action to achieve common goals
In this constantly changing world we are facing a growth dilemma: big companies tend to ignore small, but disruptive opportunities, while small companies may lack resources to scale up innovative ideas and disrupt the market.
There are few areas companies can explore, when looking for solutions to the growth dilemma. Here this goes beyond the usual short-term performance circles and looks to a longer-term perspective. This gives rise to several questions, however, for this article, we will explore the following:
• What do companies need to do to identify areas within their business models to imbed technology for future growth opportunity and not just operational efficiency?
• To what extent does new technology advancements like AI and ML mean for the current business operations and growth opportunities?
• What are the associated adoption rates, costs, time, and risk exposure in relation to identifying and implementing the above ?
Creating new disruptive value networks and ambidextrous business models is critical in providing the pillars that support and maintain a stable Core Business portfolio, while accelerating growth though disruption.
This is fundamental in highly competitive as well as new emerging adjacent markets.
Building Ambidextrous Business Models and Understanding How to apply them
The concept seems simple but offers complexities that must ensure a balanced growth portfolio, where, the core business remains operating at an optimum level, while new value gaps are being identified through the analysis of trends, big data and support technological infrastructure to generate innovations able to drive exponential growth.
The ability to employ resources and capabilities to manage the CORE portfolio, while making taking incremental steps to mitigate any associated risks, while exploring the unknown areas of future growth. Technological tools associated with artificial intelligence and Machine Learning whilst being optimised for operational efficiency must be employed for the more complex, uncertain areas of future growth.
Creating new disruptive value networks and ambidextrous business models is critical in providing the pillars that support and maintain a stable Core Business portfolio, while accelerating growth though disruption
Ambidextrous Models and Balanced Business Portfolios
The first pillar of the model is focusing on the current business and how can we keep it stable.
So, we have a CORE business and it is crucial to keep it stable, despite the external and internal pressure which may lead to slow improvements in performance thresholds and targets. Having the CORE stable will enable companies to generate revenue and profit, which can be further reinvested to support the innovation development.
At the same time, the need to accelerate the development of the Future Core and drive 10X growth in order to extend the existing portfolio is not only relevant, but vital for adjacent segments and for extending the business in that segments which will become the Core in the nearest future. Here the ability to better answer the evolving customer needs and market trends as well as opportunities becomes clear and much more attainable.
The second pillar seeks to explore the innovation gaps and how they could accelerate and drive business growth through disruption of markets using new dimensions of consumer behaviour.
Breakthrough innovations are and will continue to be driven by multi-dimensional variables, but it has become essential for businesses to design solutions and processes that not only allow but provide for transformational and disruptive strategies. Using Human Centric Design Thinking techniques, companies can scope new creative and innovative ideas for products and services able to satisfy in the best way possible the current or future customer needs. Of course, these are dependant and influenced by market dynamics, available platforms, and here one must explore creative opportunities like 5G and others.
So, what do we need to do to build sharper and expansive innovations? In our view, it is important to:
1. Identify and clearly define the Opportunity /Innovation Gap as the common area between customer needs, technology, business feasibility, and social responsibility.
2. Reframe future value-based objectives specifically around consumer behaviour
Create innovative business models that are both adaptive and resilient
4. Develop meaningful partnerships through open innovation that drives faster growth
5. Explore the stewardship of the environment–B Corps and the B Economy
The continuous evolution within business and the adoption of new models is an expected phenomenon, therefore, building the required resilience and flexibility to not only respond to emerging trends but lead and create will remain vital. Companies that look to creative collaboration through open innovation will remain at the forefront of breakthroughs in establishing new tradable value. This forms the foundation for Ambidextrous Models that harness continued growth of the core and provide opportunities for future growth that leads to future proofing.
Finally, the Henry Ford quote remains relevant, “If I had asked people what they wanted they would have said faster horses.”