1. 2013 Nigeria Social Enterprise Reports/ Awards
@IdaguDavid
OUTnovate
when innovation is
No longer enough
David Idagu argues for ‘OUTnovation’ which he
describes as going or thinking beyond
innovation. But what does this really mean? He
argues that ‚most companies have become
slaves to demographics, market research and
focus groups‛ and thereby limit the impact of
their operations by paying too much attention
to figures and data collected.
eing ‚consumer driven‛ and creating
‚added value‛ have become fashionable
terms used by businesses worldwide.
The interest in these concepts is demonstrated
in the amount of attention and premium that is
being placed on the subject of ‚understanding
the customers‛. Marketing and communication
efforts are tilting more each day in favour of
what consumers and stakeholders want and
what their expectations are from a product,
service or even CSR programmes. Surveys,
consumer behavior and opinion analyses and
being intimate with and understanding the
consumer are now seen as the secret to success.
There is a limit to what these can achieve.
Most companies have become slaves to
demographics, market research and focus
groups; hence they produce and offer services
based on what the figures tell them. The
unquestioning respect for what the consumer
and stakeholders have to say therefore becomes
an excuse for continued conservatism and
provision of innovative ‚added value‛ which
impedes their ability to achieve a quantum leap
in their value creation agenda.
eyond innovation
In view of the new reality of an
increasingly more charged,
complex, dynamic and
challenging business landscape
and more picky consumers and stakeholders,
companies must reinvent their ‚strategy wheel‛
to remain relevant in the value creation chain.
The natural impulse for business is to think of
innovation in terms of creating ‚added value‛
for it stakeholders, in order to stay afloat and
survive competition. The effect of this is that
they focus on products or services that offer
only incremental value, which more often than
not, mimic what their competitors are providing
to the same target market. This non-
differentiation is reflected in their marketing
and advert contents, promotional strategies and
even the type of CSR programmes that are
implemented. A cursory look at some of the key
industries within the Nigerian market space will
validate this assertion.
otal value
Value creation goes beyond
providing quality and high standard
products and services. It has to go
beyond value tied to the core product and
enhanced added values that form the
augmented part of the product. Competition
between organizations seems to no longer exist
at the level of products that come out of their
factories, but more in terms of what ‚what they
add‛ to their factory outputs. These added
components include packaging, delivery
arrangements, customer advice, financing,
payment options and other perks.
As much as business strategists and
communicators may be quick to settle for the
above value model, organizations need to do
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2. 2013 Nigeria Social Enterprise Reports/ Awards
@IdaguDavid
more than just create ‚added value‛ for their
stakeholders. Organizations with the "added-
value‛ orientation will remain engrossed in the
‚strategy rat-race‛, providing value which their
competitors will offer in a short while.
The Nigerian telecommunication industry for
instance is a typical case study; with their so
called ‚value added‛ products a copy-cat of
themselves, thereby confusing consumers. The
banking and indeed the FMCGs are not
exempted either. For instances, Coca-cola
comes up with a ‚coke plus meal is good‛
campaign and ‚Lucozade boost‛ follow suit,
mimicking the same campaign. MTN starts a
music reality TV show and all other network
providers jump on the wagon.
Perhaps the most significant barrier to making a
quantum leap in the value creation chain is an
obsession for providing ‚sustainable‛
advantage. When an organization has built a
clientele, when it has created a competitive
edge that translate into market share, its natural
reflex is preservation. It looks to safe guard its
market share and hopes that the brand’s
competitiveness does not erode. At this stage it
encourages the erosion of its innovative
capacity.
However, in a market where ‚hyper-
competition‛ is the new reality, businesses are
forced to either change their fundamental
strategy of creating just ‚added values‛, which
places them one step ahead or drown in the
pursuit of developing series of temporary
advantages that cannot deliver them from the
impending loss of market position to the
companies that dared to take the risk of
breaking away from the conventions, those that
decided to ‚outnovate‛.
UTnovate
In my opinion, companies
should disregard the mindset of
continuous improvements, where strategies and
value offers are aimed at doing a bit more or a
bit better than what competition is doing.
Being better is no
longer enough! The
focus of creating value
shouldn’t be
determined by what
competitors are doing
and how to create
‚something‛ that will
outsmart them or at
least meet the proverbial industry standard. This
can be tiring and may eventually wear
businesses out! The only way to beat
competition is to stop trying to beat the
competition!
UTnovation is about looking beyond
competing factors within an industry
and reconstructing market boundaries,
breaking away from focusing on accepted
functional and emotional market orientations as
well as buyer groups in a bid to create value.
OUTnovation is not just another
combination of syntax + sweet
sounding words, but rather a
paradigm shift from the way
business strategy is executed.
The value curve of Coca-cola for instance, took
a radical turn when they stopped focusing on
Pepsi Co. as their key competitor. They decided
to create a new benchmark, competing with
water rather than another cola drink. Their
seeming unrealistic ambitions not only changed
the total value consumers enjoyed, but also
O
O
The only way to
beat competition
is to stop trying
to beat the
competition!
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3. 2013 Nigeria Social Enterprise Reports/ Awards
@IdaguDavid
benefited all their stakeholders and more
importantly, reflected in their global (social)
responsibility programmes. This paradigm shift
gave rise to the popular “Coke + Meal
together” Campaign that have delivered
more sales value to the company than any other
strategy would have while chasing Pepsi Co.
ummary
At some point in the value curve, high
quality products and services was the
definition of value and then it moved
to providing augmented and additional services
to enhance usage of the products and services.
The train is moving, and consumers deserve
more. What will differentiate a successful John
from an average James is not in the added value
provided, but the total value. Businesses should
not be boxed into a pursuit of sustainable
advantages but rather take a leap away from
the Strategy-rat-race. This can be risky though,
but not taking this leap is even more risky.
Final words:
The rules of the game are waiting to be
set! OUTnovate!
Idagu David is an entrepreneur, a Public
Relations Trainer and creative head of QV3
ideation, a content marketing and marketing
communication consultancy collaborating with
brands and SMEs, helping them craft and tell
their brand story. His new book The 6th
Sense
Paradigm is in the offing. He tweets with
@IdaguDavid.
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