Tuesday, 19 February 2008

Value Creation & The Business Of Innovation

It seems to me that there is a sea of change going on in the business world. More and more companies are recognizing the seismic shifts in the customer market place are looking to innovate from the inside out.

But can they be successful? This got me thinking of a post by Fred Wilson on Twitters business model.

He pointed to the fact that "some of the best web companies of our time; Google, YouTube, Skype, and Facebook all launched without a business model and too their sweet time getting to one."

and that

"You can't monetize web services very well until you have an audience of scale."

What are large corporations tolerance for sweet time? Part of the problem of being a mass organization is that you have a mass audience and therefore generally speaking, a mass media approach to product development and marketing. With customer data bases as your starting point, and a larger than start up marketing budget, it's difficult to not think big.

Emergence is an often spoken about phenomena, and yet having the foresight to truly understand the value that is being created (and co-created) with your customers takes not only patience but bravery. Companies obviously want to reduce their risk, however, in a desire to speed to mass market there are also risks. Determining too much too soon could mean missing key opportunities and defining too much from a top down approach versus the focus on the ecosystem and allowing the network to co-create the product and/or service alongside you. Sometimes to think big long term, you have to focus on the small in the short. It may seem obvious but as they say, common sense isn't as common as it should be.

Of course, there are success stories already in market and no doubt we are going to see a tidal wave coming soon of many more. And I hope that both the successes and failures are going to be interesting to watch and learn from (I'm thinking maybe some sort of widget score board??)....


John Ounpuu said...

Great post, Leigh. Touches on something really fundamental and really important.

I think the challenge also exists for the agencies that serve these large corporations to adjust their approach and mindset.

A good agency need to be able advocate the "ecosystem" approach and help sell it into the client organization. But there's much more to it.

They need to be patient and brave as well. They need to be open to changing their mindset and the way they work in all kids of ways -- deal structure, systems, processes, attitudes, expectations, even revenue models -- in order to truly help their clients succeed in the networked marketplace.

Love to hear your take on it.

Leigh said...

I keep meaning to do a post on ways to enable the ecosystem approach in organizations more generally (process, people, structure). Now has moved up my to do list (although truth be told, I keep saying that....)

corine @ Hidden In France said...

Great post.

Gavin Heaton said...

John raises a good point. Many companies are quarterly driven. It is not that they are without strategy or planning (or even patience), but their teams and management are rewarded for quarterly performance and the attainment of year end goals.

It is like creating the "work/life" balance for a brand. Is there any real balance, and how do you make it happen, for real?

Looking forward to that ecosystem post ;)

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