Innovation best index, the degree of self-cannibalization. Don’t wait until is too late
2 december 2014. After a long professional life and many innovative projects intra-preneurship and entrepreneurship and/or evolutive,radical, disruptive innovations , I am convinced that the best index to measure innovation is the degree of Self-cannibalization to which a company is able to reach, in order to be always in the forefront and the edge of trends and progress of markets, industries, technologies but most importantly satisfying what the customer needs and cant find.
Canibalism according to wikipedia Cannibalism (from Caníbales, the Spanish name for the Caribs, a West Indies tribe that formerly practiced cannibalism) is the act or practice of humans eating the flesh or internal organs of other human beings. It is also called anthropophagy. A person who practices cannibalism is called a cannibal.
Cannibalize To remove serviceable parts from (damaged airplanes, for example) for use in the repair of other equipment of the same kind.
- To deprive of vital elements or resources, such as personnel, equipment, or funding, for use elsewhere: “It becomes necessary tocannibalize unsuccessful projects to fund those which can proceed”(Daily Report for Executives).
- To draw on as a major source: “cannibalizes the lives of his wife and friends for his second-rate novels”(Washington Post).
- To practice cannibalism on
But for Business and Marketing cannibalization is applied when a company launches a new product/service that eats up some customers of its current product and services, in general it also brings new customers from the market, expanding also its share, in some manner, resulting in additional volume, sales, and profits. Such as has been the case of Coca Cola’s line extensions in the past. In this case tit is self-cannibalization, but if it is a competitor that eats up your market launching a new product in your commercial space, then the benefits of extra volume and profits is not yours, and even worse because the whole competitors volume is lost form your product/services.
The problem we face today is that the time we have been allowed to have given to us by the markets, the users and the consumers, in order to show our capacity to adapt to changes and to design new product/services that gradually or not so gradually will replace the ones we had that are no longer as valid (even though in some cases we have to price them lower than previously or they give us lower margins) has gone like smoke, vanished. And change as we know has always had internal resistance form part or all the team of companies and institutions, what is called today the internal antibodies for innovation and progress. Antibodies are triggered to block the new projects and progress,with whatever excuse possible, even being as simple as saying this is not how we have always done it. Well the time given to us before was some from 10-15 years and has rapidly change at the rate of technological achievements, to some months and the most 1-2 years to adapt in general if we want to survive. Its due to what some people call “Express engineering and innovation·”
And this fundamental change as well as accepting that the ones that think that there is still some time left and they can wait some more, are left dragging behind, and we hace seen how there enterprises slowly but surely and sometimes not so slowly go down the cliff until they disappear after rumbling market share losses which usually¡y comes first and sales losses afterwards and, eventually, not a so sweet death. And if they dot die but their market cap value is low they will eventually be absorbed for whatever value they have or have built by larger ones we have seen this happen recently with Erickson and Google, with Nokia and Microsoft in Spain with Ono and Vodafone, with Jazztel and Orange they ate up this companies to keep them inside, or to avoid strong pricing competition which is affecting their margins, these are other types of cannibalization
Recognizing and accepting this change which is like a tornado some times, and usually like a severe phase transition , added to aknowledging the imposed acceleration and change of speed and management style and thinking, will distinguish the leaders that will succeed, and whose reinvented companies will survive
Paradigms have changed, we have seen it in many industries over the past 5 years, distribution for music and delivery, Pandora Spotify, press and media communications channels Huffington post and e-journals, among which even if we don’t want to we have to recognize is twitter with is current use that goes beyond sharing 140 character messages to become a purely real time news feeder, editorial, book shops, libraries, MOOCs and education the free online Masters, ebooks, airbandb transforming hotels and travel , Uber as taxi services disrupter, la fourchette/el tenedor service of reserves and promotions in restaurants and fast food, 3D printers that make houses with printed cement, Google predicting the next influenza epidemic days before the world experts of the CDC in Atlanta, e-commerce on textile, food,.. you name it; the customers will decide which channel to use, and if all whether we like it or not, an it is them who will evaluate the added value that we give to them if any, in order to buy from us our product/service,s or not anymore. Loyalty will be on that value added perceived by them
And what has happened , to what can it be attributed, its due to the fact of times to market of engineering products and services which has shorten their life cycle, due to digital transformation, technological advancement, fast development in collaborative software and coding, sharing, data, big data, information, communication, mobile apps, internet, new materials, nano technology, strong cost reductions has accelerated, all of which we have just seen the iceberg tip of what is next on radical innovation evolution, revolution and/or disruptions when new markets that did not exist are created everyday, surprising us at vertiginous speed, the exponential is the new norm and we don’t know how to play in this new arena but have to learn how to without fear.
Five ideas to take away from this reading;
1-Size makes a difference, take advantage, attack . Más que las patentes, o la protección de propiedad intelectual, o los acuerdos de gremios, el mundo que esta allí afuera no espera a queprotestemos. Pongámonos en marcha y actuemos porque las grandes compañías en lugar de sentirse atacadas tienen mas posibilidades e innovar si se lo toman en serio, más músculo, más resiliencia si se toman riesgos, más inversiones posibles tanto en dinero como en recursos incluidos los equipos preparados y experimentados.
2- Find teams that are passionate and not contaminated, find them from within or external to the organization, abiertos a nuevas ideas, procesos, de modelos, precios. Hay que poner a trabajar a los equipos, aquellos buenos en repensarse todo y replantearse todo con nuevas ideas y cruzarlo con la incorporación de emprendedores, que están acostumbrados a hacerse lo que encuentran, a crear mercados y necesidades nuevas o a ver los nichos por donde van las tendencias, aunque no sepan nada de vuestros mercados es otra forma de pensar, y es eso mismo lo que los hace necesarios porque no están contaminados
3- Be in Beta permanent state quiere decir experimentando por prueba y error en lugar de enfocar y esperar a tener el producto o servicio perfecto. Creo que es más rápido y mas eficaz acercarse por aproximaciones sucesivas de corregir y volver a lanzar y pedir información al cliente estableciendo un dialogo con el. Hay que romper el ciclo de parálisis por análisis tan frecuente en mas compañías e instituciones
And as Como Sanjay Sarma says “run shoot aim” Because today is bets to “ready fire aim” than the classical “ready aim fire” since you probably have more than one bullet/arrow ready; if you only had one, the it may not be the best advise. But once you have many you try alternatives and you correct focus afterwards, and in the meantime you advance faster tom¡wards the target Sanjai Sarma is the Digital education Director at MIT as well as leads the MITex project and edEx and Opencourseware as well . Sarma whom I met and admire and of whom the President Rafael Reif said “He is an experimental leader, that will shape the suture of Campus”
4- In continuous dialogue with customers and users , con tu usuario. Recordemos que Don Lamento habla más que Don Contento. Que el dialogo debe ser abierto, transparente, auténtico, democrático. Que la democracia no es estar todos de acuerdo sino ese espacio donde las diferencias pueden convivir. pero se necesita algunas reglas no muchas de convivencia y para que funcione tiene que apoyarse las iniciativas de abajo arriba y de arriba a abajo. No es una clásica pirámide organizativa ni una pirámide invertida sino una especie de poliedro flexible donde se intercambian los roles según las necesidades de innovación de todos los stakeholders, clientes, proveedores, partners, emprendedores, ideators, universidades, donde la innovación cambia los vértices. The time has come for the trust economy versus the property economy
And in this new dialog of social networks and in particular the social networks of ideas like ideas4all Innovation Agora .ideas4all is based in the democratization of the idea generation filtering and selection processes ”
5- . The best Innovation index is the degree of Self-Cannibalization Adelántate cuando veas una tendencia o escuches a tu cliente y a tu mercado o a tus partners, es el momento de auto-canibalizarte if you do not self-cannibalize the competitors or new entrants to the market will sustituirte a ti mismo ya está aquí sobre todo a hora que la vida media de las empresas es casi diez años frente a hace 50 años que era de mas de 50 años, solo sobreviven las que se reinventan; para esto hay que estar abierto a todos los stakeholders nos den ideas en distintas fases de desarrollo y ejecución, y que puedan y les permitamos sumar y aportar incluyendo pequeñas start-ups que están en la frontera, en la vanguardia hacia el futuro. Un ejemplo muy patente ha sido Apple, que canibalizándose a sí misma y escuchando las preferencias de diseño y usabilidades amigables y simples que quiere el cliente, ha conseguido canibalizar también a distintos competidores, pero ojo nadie se puede dormir en los laureles del éxito. Ya Google compro la compañía de prototipado de IOS por ejemplo hace dos semanas.
“There is nothing in life worth being afraid of, we only need to understand ” as Marie Curie twice Noble laureate said, and I moreover say we should not be afraid of innovation and the future.