Wednesday 7 October 2009

1950s comic book has lessons for business

Posted by Nick, account manager















The current exhibition at London’s Science Museum, “Dan Dare and the birth of hi-tech Britain”, brings to life a golden era of UK manufacturing.

The exhibition uses the popular comic strip as a backdrop for the plethora of British manufacturing success stories that defined Britain’s bid to re-invent itself as a high tech nation after the Second World War.

But tellingly the exhibition also highlights the factors which created so much pressure for companies in the UK and around the world. The sentence “In an age before globalisation, products from rockets to radios sprang from local roots” is heavy with nostalgia for a bygone age, but it also contains the reason why that era is indeed ‘bygone’.

As one of the first nations to industrialise, Britain’s ability to invent, design and innovate became inextricably linked to manufacture. The assumption was that the two went hand in hand. But as Britain moved in to the second half of the 20th century, flush with the success of its wartime ingenuity (radar, penicillin, the jet engine), it failed to spot the impact of advances in transport and communication that would deliver ‘globalisation’. The intrinsic value of its innovations should have been recognised, and they should not have been regarded as just ideas that might keep the country’s aging and increasingly expensive factories turning.

The display therefore contains two lessons for companies both in Britain and elsewhere. A salutary one in that the need to understand the wider context of design and innovation is vital. An inspirational one in that many of the products featured could be recognised as having made major contributions to modern life. Murphy, Cona and Russell Hobbs are just a few of the brands celebrated for creating a new home-life in post-war Britain.

The show leaves us with another double-edged message.

“...Britain retains an especially strong creative lead in conceptualisation, design and branding. Just as in the pages of Dan Dare, Britain remains the place where the future is imagined in to being.”

The challenge remains how to capitalise on conceptualisation and design as we can’t rely on using a manufacturing base to reap the dividends of great ideas. Imagination is always important, but it won’t pay the mortgage (or the budget deficit) by itself.

Friday 2 October 2009

“Reverse innovation” : a cultural shift for business growth in the twenty-teens

Posted by Nick, account manager

We recently read an interesting article on the Harvard Business Review website on the shift in GE's culture from glocalisation towards adopting "reverse innovation" as a means of growth beyond its developed markets.

Glocalisation is the widely-used practice of developing one product for a company's key local market and distributing it globally with little change to accommodate local requirements. This means that local, especially developing, markets with different requirements are only skimmed. The impetus for change away from this practice is twofold: the global recession has encouraged multinationals to look to faster-growing developing ELDCs for sustained growth and recovery, and the rapid development of traditionally "third world" countries, often with large low-salaried populations, as competitors to market leaders on the world stage.

GE's solution was to adopt a mix of high-level R&D centres in more traditionally "advanced" nations, but to also create local R&D centres, and eventually local P&L-responsible teams, in India, China and other developing countries. The local teams have developed lower cost (selling prices that are, maybe, 15% of the company's higher-level products) items that meet the requirements of their locality. A prime example is the development of GE's portable ultrasound system. Working as an attachment to a laptop, the system met the demand for easy-to-use portable ultrasound devices that could be taken to patients who weren't able to travel to central clinics (which also couldn't fund large, expensive, fixed devices). The "reverse" part of this innovation was to then introduce the portable system back into the US and other core markets, but to segment the product offering and grow the market without cannibalising sales of higher-level products.

This is evidence enough that innovative companies operating in today's connected world have to think differently and react quickly in order to maintain a lead against both traditional competitors and newly-emerging competing fronts. As product development costs and time decrease, it is only through a combination of building brand and demonstrating real value that companies can truly see a "return on innovation".

The full article (subscription may be required) can be read at http://hbr.harvardbusiness.org/2009/10/how-ge-is-disrupting-itself/ar/1