Yet another reinforcement of the importance of adapting to change
Amazon is a great example of a company that has brought about innovation by leveraging technology (Reuters)
In the present age it is accepted that innovations cannot be just incremental because they do not work. The scale has to be exponential. This is what Vivek Wadhwa, Ismail Amla and Alex Salkever talk about in their book, From Incremental to Exponential.
This is another guide as to how companies should proceed to remain relevant and in any such narrative the examples of Kodak and Sears are mandatory. These companies never saw change coming and did not alter their business plans, becoming irrelevant. Willingness, adaptation and speed are the ingredients here.
Normally one links technology-based innovation with startups as this is where all the good stories are told. But large existing companies also have the power to bring about innovation by leveraging technology. This is where they give the example of Amazon and its expansion. Starting with being a bookstore it now sells everything. The use of technology to link buyers and sellers has made the conventional concept of retailing quite outdated.
The concept of Amazon Prime where one pays an annual fee and gets purchases delivered free of cost was a novel innovation which brought in billions of dollars in sales as all shoppers opted for this scheme and then kept buying more on this site to realise this cost. All other pay channels and entertainment models are extensions of the mantra of innovation using technology. Therefore, existing companies too should learn to innovate in a big way.
While this sounds reasonable that every company should be adopting this course of action given that access to AI and ML is open to each one of us, why is it that it is not universal? Ideally if everyone followed suit there would be gains from everyone and there would be only winners. Here is where the authors point out are the eight deadly sins which keep companies back.
The first is not listening. An open culture should be there where internally one should listen to suggestions as well as warnings. The second is lack of patience. This is a difficult one as it is hard to find a balance between how long one can wait for results to be delivered. The third is lack of distance which holds mainly for the existing large companies which incubate new ideas through a separate company. Fourth is the absence of adequate resources being deployed for R&D. The other sins are even more commonplace. Having the wrong people do the work for one. Next is the lack of accountability. The other two factors which again are important is the absence of culture, which is hard to change, and political support which refers to the willingness of the Board to provide direction and encouragement.
Innovation is not just confined to the private sector that runs for profit but also the government, which can innovate and save money as it is not in the business of making profit.
This is another ‘how to’ book and may not tell anything new considering that there are several publications on the subject with similar examples. But reading it is useful as it drives home the message.