I’ve given to my self a great opportunity to cross a couple of interesting readings about how innovation helps and hits organizations. The first one is regards of my last three posts: HBR’s note named “Build an innovation engine in 90 days” by Scott D. Anthony, David S. Ducan, and Pontus M.A. Siren. The second one is “Exponential Organizations: Why new organizations are ten times better, faster, and cheaper than yours (and what to do about it)” by @salimismail. This last one was a suggested reading to support some key messages that the board has been managing.
Through the next picture I will be bringing some thoughts putting pieces together from both readings.
If you think linear, you will get a linear performance. Why limit your results in that way?
Today’s organization are growing exponentially. Salim is bringing cases like Waze versus Naviteq where digitalization is supporting exponential grow. A business depending on physical infrastructure will never grow on that way.
Our case, datacenter services are our core business. However, it’s very important digitalize our offering in order to do it exponential. Datacenter’s business is not just concrete and power/cooling equipment… big part of the revenue comes from managed services.
Then, Why not digitalize our managed services? Cloud/DevOps is the fastest path to it. Automation drives efficiency and agility.
Now, googling cloud gets you about 1,110,000,000 results in 0.41 seconds. A competitive market right?. Then, How to make your product shine on that? Well, people buy trust and is something that already the company have with their customers. “Just” add the automation now.
Isn’t just digitalization. You have to offer something fresh. Something maybe away from your core business. Something that people will need so badly. Something that cannot be reproduced by your competition in a short time (eventually, everything can be reproduced or improved by your competition). There’s when innovation will come to support your new growth, and as this post’s picture states “as larger gap you’ve got between your revenue’s goal and your honest business metrics, as further from your core you will have to innovate and longer wait you will wait for substantial revenue from this innovation”
Then, what’s up if your goal is exponential? Will you ask your sales force to duplicate their quota every quarter?
Thinking exponential increases the gap many times. right?
Therefore, being exponential pushes your organization to innovate badly going much further from your core services. This is not jus innovating by trying to digitalize your existent offer, I mean, efforts to create something completely different. Probably you will have to constantly recruit talent and create new business units with dedicated resources. You will have to empower and stress your innovation system to the highest levels and assign executives that can be stay close to disengage or power up some projects quickly.
Not all companies can afford this sort of vertiginous innovation system… It requires an extraordinary culture to embrace change and collaboration avoiding acts of individual heroism.
A last thought. An small math exercise to size what is needed: If your current revenue per quarter is 250M and your goal is to have 2.5B in 4 years (thinking exponential) and your growth a constant rate of 17% Quater-to-Quarter – means duplicate your revenue every year – If your market segment grows 15% every year, then your will have a gap around 2B in the last quarter. How much is your organization willing to invest to innovate and cover up a gap of new growth of 6.5B in 2018?
See you around!