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For African businesses to create sustained growth they need to be innovating in ways which are more relevant, more useful and more meaningful than global competitors. The innovation required goes beyond taking market share from competitors; it is about transforming categories, unlocking new markets and helping to create favourable conditions for market growth. Crucially, in the African context, it is about innovation that creates jobs and entrepreneurial opportunities - upskilling, empowering and contributing to prosperity on the continent. To download the in-depth whitepaper on which this highlights presentation is based, visit: http://www.ywood.co.za/our-thinking/white-papers/transformative-innovation-an-african-path-to-success.aspx
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The future’s bright
“Emerging economies’ share of Fortune Global 500
companies will… jump to more than 45% by 2025, up
from just 5%in 2000. Many of these businesses,
having been nurtured in difficult operating
environments, are not only more agile than their
counterparts from advanced economies but also
prepared to invest for the long term, even if this cuts
earnings in the next few quarters.”
McKinsey & Company, 2013
We have some of the world’s most inventive,
resourceful people
We have been involved in developing
some of the world’s most useful and
transformative technologies
Sources:
- Battelle
- National Bureau of Statistics of Chine
- Ministry of Commerce of the People's Republic of China
R&D Spend in US$ Billions
050
100150200250300350400450
0.00%0.50%1.00%1.50%2.00%2.50%3.00%3.50%4.00%
R&D Spend as proportion of GDP
80% of all employment in Sub-Saharan Africa takes
place in the informal sector
Mo Ibrahim Foundation, 2012
We’ve inherited a
culture of authority
We’re scared
And we’re thinking about
market attractiveness
all wrong
• Get to know your customers
• Flatten your structures
• Think outside the pie
How can we overcome these barriers?
How can you grow the pie?
Or transform it?
LONG-TERM
SOCIETAL
VALUE
Education,
healthcare
infrastructure and
sustainable
natural
resources
DIRECT
EMPLOYMENT
VALUE
New employment
and
entrepreneurial
opportunities
MARKET
VALUE
Growing
categories,
developing new
categories
and unlocking
new markets
CUSTOMER
VALUE
Better
value for existing
customers
SHAREHOLDER
VALUE
Better
Revenue
and profit
Benefits:
Shareholder
Value
• Define the problem Be clear about what you need to achieve or fix
• Understand your customer better than anyone else Authentic ethnography
• Get Lateral Speak to experts from unrelated fields, include diverse participants, keep your eyes and ears open
• Take the time You’re not going to solve it in single brainstorm
• Get the attitude right Build, don’t break
Getting Customer Innovation Right
“The most important characteristic of
industry-changing innovators is the ability to
spot consumer trends before the rest. Very
often, those trends are already evident in
other, seemingly unrelated, industries.”
Peter Schoeman, Divisional Director Sales & Marketing,
City Lodge Hotel Group
• Ditch the unnecessary conventions
• Turn pirates into partners
• Identify behaviour shifts in other categories
Key techniques for innovation that grow markets:
INPUTS DESIGN MANUFACTURING DISTRIBUTION MARKETING AFTER-SALES
SERVICE
CORE BUSINESS
Opportunities for entrepreneurial innovation?
BUSINESS CHAIN
• Focus on your core
• Innovate for people
• Piggyback on existing distribution networks and skills
Key techniques for innovation that
creates employment value:
YOUR BUSINESS’
PURPOSE
(eg. Bringing books to
more people)
SOCIAL NEEDS
OF YOUR
MARKET
(eg. Education)
• Define your purpose
• Understand the pressing societal needs faced by your market
• Focus on innovations that leverage your practical strengths
Key techniques for innovation that
creates societal value.
Unintended benefits
“An aspect of FNB’s success is an entrenched
culture of giving back. The culture is nurtured by
our volunteer programme which has a very high
level of staff participation.
The simple act of giving back helps you
understand your markets better and enables
you to solve the problems they face.”
Hema Morar & Seth Maanda, FNB
It’s too expensive
• Crunch the numbers
Most innovations don’t get beyond the idea stage
because there’s no clear financial picture of what
success looks like
We’re too frantic
• Crunch the numbers
Most innovations don’t get beyond the idea stage
because there’s no clear financial picture of what
success looks like
• Build an innovation lab
A subdivision enables you to step out of the rat
race to explore, trial, and develop new
innovations
We’re doing fine
We don’t need it.
• Crunch the numbers
Most innovations don’t get beyond the idea stage
because there’s no clear financial picture of what
success looks like
• Build an innovation lab
A subdivision enables you to step out of the rat
race to explore, trial, and develop new
innovations
• Make it about survival
Make it a KPI that at least 20% of revenue must
come from transformative innovation
Thank you
Get in touch:
info@ywood.co.za
www.ywood.co.za
JHB: 011 268 5211
CT: 021 425 0344
@askYellowwood
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