From Incremental to Exponential review: Another guide on how companies should proceed to remain relevant
Today it is accepted that innovations cannot just be incremental because they don’t work. The scale must be exponential. Vivek Wadhwa, Ismail Amla and Alex Salkever talk about this in their book From Incremental to Exponential.
This is another guide on how companies should proceed to stay relevant. In such reports, the Kodak and Sears examples are mandatory. These companies never saw change or changed their business plans, which became irrelevant. Willingness, adaptation and speed are the ingredients here.
Usually you associate technology-based innovation with startups, as this is where all the good stories are told. Large existing companies also have the power to innovate through the use of technology. Here they give the example of Amazon and its extension. As a bookstore, it sells everything now. The use of technology to connect buyers and sellers has made the traditional concept of retail quite out of date.
Amazon Prime’s concept of paying an annual fee and delivering purchases for free was a novel innovation that generated billions of dollars in sales as all buyers chose this program and then kept buying more on this website to realize this cost. All other payment channels and entertainment models are extensions of the mantra of innovation with the help of technology. Therefore, existing companies should also learn to innovate on a large scale.
While it sounds reasonable for every company to use this approach, since each of us has access to AI and ML, why isn’t it universal? If everyone followed suit, there would ideally be profits from everyone and there would only be winners. Here the authors point out the eight deadly sins that hold companies back.
The first one doesn’t listen. There should be an open culture of listening to both suggestions and warnings internally. The second is a lack of patience. This is difficult because it is difficult to strike a balance between waiting for results. The third reason is the lack of distance, which is mainly true of the existing large companies generating new ideas through a separate company. Fourth, there is a lack of adequate research and development resources. The other sins are even more common. The wrong people do the work for you. Next comes the lack of accountability. The other two factors that are again important are the lack of a culture that is difficult to change and the political support that relates to the willingness of the board of directors to provide direction and encouragement.
Innovation is not just limited to the private sector, which is focused on profit, but also to the government, which can innovate and save money as it is not about making profit.
This is another “how to” book and may not tell you anything new considering that there are several publications on the subject with similar examples. However, reading is useful as it brings the news home.
Madan Sabnavis is the chief economist at CARE Ratings
From incremental to exponential
Vivek Wadhwa, Ismail Amla and Alex Salkever
P. 216, Rs 499
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