Innovation and the supply chain

The supply chain has been the scene of many innovations over the years. These innovations have occurred throughout, including vehicles, distribution centres and a variety of other areas within the supply chain.

However, an interesting business model I saw used the other day, left me impressed with the entrepreneur behind it. It is ideal for the SME wanting to grow quickly with limited capital.

The SME approached certain large retailers with a product which they did not sell, because while the product is directly related to their target market, it is a complex product to sell and install. So he set up a national network using other SMEs to do the complex installation, he manages the customer in-store and then manages the whole process via a call centre.

The large retailers do not charge rent, they simply take a percentage of turnover.

Therefore the entrepreneur has an immediate national sales network, immediate national installation network, cash sales, and a source of credit from the large retailers for clients giving him cash once again, and it cost him very little to do so.

It was innovative for the large retailers as well, because they increase their revenue streams with little to no costs.

It has been done before, but not in this way. I salute this true entrepreneur.

Innovation and systems

Innovation is often perceived to be a light bulb moment that is just brilliant, and then everyone lives happily ever after. However, innovation is not like that. It requires on-going effort to innovate. Continuous effort is required for both small step and disruptive innovation.

This effort is a problem if allowed to be a haphazard effort. Systems need to be implemented in order to enforce a systematic and systemic approach to innovation. This means understanding the areas where innovation is needed and most likely and equally where it is not perceived to be needed.

Examples of this system would include implementing a regular PESTEL analysis. This would require that tasks are allocated to various individuals and then regular updates provided to the broader team, and then discussed.

How do you innovate in your organisation?

SMEs - "thinking out of the box"

I made it clear what I thought of this phrase in my last blog entry. I was recently honoured to be invited to speak to the Rhodes U students as a guest speaker at their TED-X.

The link below will take you to a video which is my speech on this topic. You need about 14 minutes.

http://www.youtube.com/watch?v=qpA36U8V_hk

Innovation - the sources

Innovation is one topic that can quickly drive my blood pressure up. The moment you talk about innovation, the first response is "Yes, you have to think out of the box". While I understand the origin of this statement, it is in my mind one of the used and abused "management thingys" I have ever come across. I have seen too many fools trying to stimulate people to think out of the box, with a very negative and very useless outcome.

Innovation is something which requires a different approach. I am a strong believer in reading. I believe we should read broadly and across industries. Read about things you do not know. Read about other ideas and solutions to other problems. Talk to other people. Visit other businesses and listen to their staff talking about their problems and solutions. Solutions often transfer across industry sectors. Debate and discuss with different people.

The opportunities that are innovation dependent need you to change how you think, so by continuing to do the same old thing, the same old way, with the same old people is not the way to go. We need to change all this.  Chambers of Commerce & Industries used to be sources of innovation. You had a large executive committee comprised of a large number of people from many sectors. They chatted, debated argued, contributed, from so many perspectives, and in the process developed new solutions.

When last did you meet with business peers from other industries? When last did you buy a magazine from another sector?  

Corporate entrepreneurship and the Intrapreneurship degree

Corporate entrepreneurship or intrapreneurship in South Africa is a topic I find interesting. There are undoubtedly some extremely entrepreneurial corporates in South Africa. The question which is worthy of some research, is how far down does this entrepreneurial activity go, or is it the prerogative of senior management only. I lectured intrapreneurship to 2nd year students in 2011 and have to say that the students' perceptions scared me. They believe that a degree with an intrapreneurship major is going to allow them to open the door to the safe on appointment at a large company, and that they will then be able to operate their businesses within the business. They have been set up to fail in my opinion. Junior staff seldom get budgets for their ideas. They are lucky if they ever get budgets. I believe that it is time that someone did some research on intrapreneurship in South African businesses, and produced a textbook that explained the truth of the topic, and destroyed the urban legends of intrapreneurship that exist in South Africa.Too many students are in for a nasty surprise i believe, and will have wasted 3 years getting a degree that will never meet their expectations.

Corporate entrepreneurship and innovation - errors made

Corporate entrepreneurship and innovation is extremely difficult as we have previously established. During the Internet bubble, many businesses claimed to have insufficient skills and consequently launched separate businesses to create a "clicks" presence in addition to a "bricks" presence.

This was a major error on the part of management. In splitting the business they created a new entity with a new culture. While it may have been more innovative, it quite likely also lost many of the strengths of the original business and management team.

The point being made is that innovation is served as an integral part of the organisation, and not as an aside or a bolt-on.

Corporate entrepreneurship and innovation - there is a lot of hope

Entrepreneurship and innovation continue to elude the bulk of large businesses. However, this by no means indicates that it is totally dead in the corporate environment. I have been reading broadly lately on this topic, and I am please to say that I am finding more and more examples of corporate entrepreneurship and innovation.

Over the next few blogs I will be looking at some of the examples I have found, and hopefully this will inspire you to find new ways to make your business entrepreneurial and innovative.