How To Innovate Your Business From The Inside When Demand Drops

So this week what I want to talk about is the challenge a lot of people are facing around their business model. And here’s the challenge that everyone’s facing, which is that if you think about that when we look at our business from a really big picture level we kind of go the traditional SWOT analysis of what we are good at, what we are bad at, what are the opportunities out there and what are threats out there. 

Bucket of Petrol

When anyone’s looking at where to innovate they’re always looking at those kinds of macro trends and what are those big things happening out there in the world. You know it’s an aging population, there’s a move to digital, there’s an increasing globalisation, all those big trends that people are trying to pick well in a kind of what’s the next thing.

So those usual headwinds or tailwinds that we call them. So what are the things that are receding and accelerating, what this coronavirus is done is actually the way I describe it is like throwing a big bucket of petrol right on your SWOT analysis. 

So what I mean by on fire is that literally if you think about if you had a strength, like if you’re in retail and you got a strength around that you know you bring in the box. If you’ve got a weakness in part of your business model, which is that it is really old school and bricks-and-mortar. You don’t do a lot of digital, that’s really hard right now. 

If you are thinking about creating your future business model and your opportunity, kind of now is the time and if there is a threat out there often it’s becoming a lot worse than it was before this happened. So that big bucket of petrol effects forcing people to ask themselves the question of, Is now the time to pivot? Or is now the time to stay as is?

The Analogy

What I help people with often is scaling up. So that focus, the scale and leadership to be able to galvanize their organisation to achieve a vision and what that vision is, and what I’m often trying to balance is two things in this, where I got this from by the way is from a guy called Alex Osterwalder, called the Invincible company, and so this isn’t me that stuff before was but this is his. 

He talks about this idea of the invincible company and what he says is that you think about two organisations that you know really well and you think about their headquarters. This company is based in Asia, it’s a manufacturing company, the other one is headquartered in California and it’s a digital products business. So with company A here it’s well-known, and Alex uses this in  the stuff he does, is that this company has named its headquarters “100 years” because it’s been around 100 years. It’s really proud of that, and that’s the name of the actual building where the headquarters is now. 

This other company here is actually Amazon and you know what their headquarter’s name is? It’s actually called “Day 1” and the reason they call it “Day 1” is everyone should have the mindset of this being day one of the company. We might not exist tomorrow. And he uses that  as an analogy between the culture in your business. Do you have a culture of exploration or do you have a culture of execution? 

Culture of Exploration and Execution

And like for these businesses here and many of the bigger businesses that I work with, many of them have a culture where if you think about execution, is that a majority their business for a long period of time is being focused on management execution and management. If you think about the focus of Management it’s about single product, it’s about process, it’s about control, and it’s about quality, all those things are very important.

But what if you work in a business where the macro trends mean that actually you can execute really well, but there’s no demand and that demand’s gone away. And so the argument is that rather than execution to what extent is your business focused on exploration? An exploration requires a different set of skills. It requires you about coming up with concepts and ideas for the future, for future sources of growth and revenue, testing fast, and when you test ideas, test a portfolio of ideas, test six and gather evidence on which will work and kill the rest. And you look at all the great companies, this is what they do. 

They actually create something, they create a concept, they put it out in the market. If it doesn’t work they kill it, they let it go. If you think about that compared to a management way of working, we hold on to our ideas, we sort of pivot with our ideas, and we get connected to them, we don’t want to let them go because we feel like they’re ours. Whereas in an exploration environment, we intentionally are trying to kill stuff that won’t work. 

So the idea of this was how do you innovate from within, what I want to really challenge you on is have you got that balance right between the execution environment and the exploration environment? May be challenge on the execution side, but it’s really important that you create party or business around the exploration side if you want to create new ideas, new things. So if you think about this is all your available time in your business and your business is focus.

This is all your available time and all of that at the moment is on execution. That works in an environment where there’s no macro change, but we’re not in that environment right now, and so what works really well is that from within your business you need to carve off part of the available resources and time and give it a specific boundary. It can exist from within your business, but you have to give it a boundary.

So if you think about  it, are there 6 to 10 people with the right attitude and the right skills and capabilities that could generate a portfolio of 6 ideas that you could then test in the market quickly, really quickly with customers. And eventually might take 4 weeks, 2 to 4 weeks choose one where you could focus your resources, but you need to create that from within, create a team that can do that.

Summary

Let me just review what I’ve been through, which is that there are forces at the moment out there in the world, big macro forces that are pouring petrol in your business model. Things are working and not working and that they are accelerating in terms of you getting feedback, things happening faster than normally would. 

Exploration or execution, where is your focus at the moment? And if it needs to be on exploration, then you know where could you carve that 16 people with the right attitude and skills and focus them on developing portfolio projects that could create something different for you? So rather than sitting still and executing doing the same thing. You can put something that will create a future.

Leave me a comment or Get in Touch

So I hope that’s been useful. Here’s the thing, if you’ve got a question about how to create this from within or how to focus or pivot your business and how you might do that in the next quarter, One of the things that I do is help businesses over a period of time get focus on their business, get aligned, get coordinated.

Send me a message, a private message, or you can respond to my email if you’re on the list and just put the word pivot and I’ll just send you a link to some options around how that can work for you and the things I can provide. Hope that’s been useful.