Grant Leboff: When we talk about innovation, one of the challenges businesses have today is that the world is moving so fast, you almost don’t get a chance to catch your breath. And the next thing has already come along, and the next thing after that. and everything is so disposable. So how does a company keep up with itself, and with the marketplace, to maintain some sort of competitive advantage, because most sectors these days are moving pretty fast, it almost doesn’t matter which one you’re in?
Costas Papaikonomou I completely agree, it is speeding up. It even sped up dramatically within my career and I’ve only been around not even 20 years doing this professionally. The answer is, of course, if you know how to differentiate – let’s take that as a given- is that you don’t lock yourself into expensive assets, stuff that can’t move or can’t change. If you build a factory to contain a new food product for example, don’t assume that that food product will be relevant 18 months from now. Assume that whatever asset you put on the factory floor, you need to be able to replace bits and pieces of that line, very quickly.
Actually I still hear conversations, particularly following on products that we do with our clients – which is all about getting quickly to what is the new innovation going to be – who are still talking about keeping that product unchanged for four, five, six years, and investing in high-speed equipment which will allow them to do massive volumes, actually knowing that those volumes, by the time you hit them, will be at peak demand and they be going down very quickly after that.
So when you make investments, which you will need to do in almost any category in which you innovate, make sure you do it in a way that remains flexible at its highest possible degree, because even if you don’t want it to change, it will change. The world around you will change faster than you think it will, and it is always easier to change a small part of your business or your operational system, rather than to literally scrap everything and start all over.
Grant Leboff: So really, build a business do you can change it, to be adaptable, to be a flexible..
Costas Papaikonomou And assume it changes so quickly that by the time you have your new things in place it will already be different from when you scoped it out. And that goes all the way down to the people you hire, you hire a particular person to do X and you can presume that by the time that they are in place, the job will have turned into X +, or Y or even Z. So it’s not just the assets, as in stuff bolted to the floor, but it’s also the people you bring on board. They will also have to be, basically, as flexible with you, understanding that whatever job they were hired for, is probably not the jobs that they will have in 5 to 10 years from now, if they are even still with the business.
Grant Leboff: And how does a business put any sort of KPI’s in place in that kind of environment? So when you are going in and you are starting to innovate – obviously eventually you will know that something works in the marketplace – but as you’re going through that process and those iterations, how do you have any KPI’s against those to be able to measure anything?
Costas Papaikonomou Do you mean to say KPI’s, for example for the people on the team?
Grant Leboff: Yes, and just making sure that in some way, however creative you want to be, there has to be some process at some point, against which things are measured against. So how do you do that, what sort of things can you put in place?
Costas Papaikonomou That’s a very good question and it’s almost like the million-dollar question, in this new corporate world. Because you’re looking for change, and you want to be benefiting from the change, probably the KPI should be related to change rather than – to say – fixed levels, and say you do a minimum of this, we do exactly that…
How do you guarantee you’re always out there with new stuff? Probably by relating the revenue coming in to your business from the products that are being launched recently to a KPI. So if you say to someone in an innovation team or in a marketing team or anywhere actually, 40% of what we make our money on should have been launched in the past three years, then you have a massive KPI for people to keep refreshing their portfolio, and of course what will happen is, in some cases, they refresh it for the sake of refreshing it because that’s the KPI you gave them, but it’s much better than not refreshing it at all because then you’ll know you will be too late coming up with new stuff when you actually need it, and that’s also kind of the inefficiency of all this changing, is sometimes you change without being entirely necessary, on the other hand you can get lucky and change it just ahead of the time when he became really necessary and then you’re the first one out there doing it.
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