Next Economy Organisations
Listen to the conversation (14 August 2017) between Clay Christensen, John Hagel, and Carin Watson on how large organisations will survive and thrive in the new paradigm of startups, disruption, and exponential technologies.
The speakers take to the stage at around the 13-minute mark.
John Hagel Suggested ...
Today’s companies are facing increasing pressures to pursue growth. Traditionally there have been two paths for organisations to achieve growth – make versus buy. But this conversation misses a third path, which is; “Leveraged Growth”. This involves an organisation mobilising 3rd party organisations to provide their resources to address that first organisation’s customers’ unmet needs, and allows the company to capture some of that growth.
Leveraged Growth reduces the investment required and accelerates the time to revenue for that first organisation – and yet is often not on the agenda of many organisations.
To do this effectively, John suggests organisations do three things:
- Expand horizons of unmet needs, think more broadly about where customers pain points and needs are.
- Be willing to abandon a “command and control” mindset in favour of a more open relationship. By shaping and influencing these 3rd party resources, rather than controlling them, opportunities open up that are impossible to tap in any other mindset.
- Understand and mobilise platforms to truly make leveraged growth possible.
Clay Christensen Suggested ...
Today, there are three types of innovations available to companies. For companies to succeed, that investment in each must be balanced.
- Market Creating Innovation – which involves making previously complicated and expensive products into something more accessible and affordable. This allows a whole new group of people to have access, and creates a whole new market.
- Sustained Innovation – which involves making good products better. This in aggregate doesn’t create growth, but it does increase margins on existing products. By making good products better, we can capture more value.
- Efficiency Innovation – which involves making more values with less input.
Clay encourages us to instead balance the investments in innovation that cause not just profits, but allow companies to create value and growth through innovation.
John added that this may require picking some metrics outside of financial metrics, to map indicators or early success before new markets are created or captured.