Emerald Group Publishing Limited
Article Type: Editorial From: Strategy & Leadership, Volume 43, Issue 1
In this issue we find out how the winners of world’s Best Innovator contest have succeeded over the past decade and we also explore some unconventional approaches to business model innovation through risk mitigation. The five articles offer conceptual guidance and provide examples that demonstrate best practice for:
Building the perpetually innovative company.
Continuous delivery: learning software innovators’ success secrets.
Innovation that adds value by mitigating risk.
Strategic Risk Management: a guide to threat and opportunity identification.
The Internet of Things: a gold rush of new business models.
In their article “How to build the permanently innovative company: five tested sets of management practices,” A.T. Kearney consultants Kai Engel, Violetka Dirlea, Stephen Dyer and Jochen Graff reveal the five crucial management practices that have propelled the dozen winners of The Best Innovator competition, which began in Germany in 2003 and is now held in nearly 20 countries including many Western European countries, the USA, Russia, Brazil and China. This annual contest ranks advances in the how-to of innovation and what leading companies are doing to achieve better yield with their innovation strategies.
In his masterclass, “New lessons for leaders about continuous innovation,” Stephen Denning challenges conventional wisdom by proposing that all companies can benefit from studying the “DevOps” or “Continuous Delivery” practices that a few exemplary software companies have mastered. In this process of rapid software development, the distinction between “operations” and “development” collapses and everyone is involved in continuous innovation. Denning warns, “The reality is that most firms today, whether they know it or not, are already software companies and will steadily become more so. Their competence in dealing with software will be a key part of their competitive edge.”
In his masterclass, “Three ideas for creating new value through managing risk in today’s dynamic environment,” Brian Leavy guides leaders through three new approaches to identifying and managing risk, all of which offer innovators opportunities for value creation. These include business model innovations aimed mainly at the mitigation of information risk and incentive-alignment risk, the new advantages to be found in downstream value chain activities, particularly those aimed at reducing customers’ costs and risk and also a better way to manage the risk of losing key talent in an era when corporate agility and employee security are in conflict.
Many firms were blindsided by the financial crisis of 2007-2008 because they did not have mechanisms in place to identify ambiguous threats and track the weak signals that could have warned them, and as a result they were not prepared for the stresses and investment opportunities such a crisis generated. Joseph Calandro Jr offers “A leader’s guide to strategic risk management” that defines a process of identifying, assessing and mitigating potentially enterprise-threatening losses before they manifest themselves and then spiral out of control.
In their article “The next digital gold rush: how the Internet of Things will create liquid, transparent markets,” IBM industry experts Paul Brody and Veena Pureswaran paint a vision of potential business model innovation in the coming Internet of Things (IoT). The IoT creates the ability to digitize, sell and deliver physical assets as easily as with virtual goods today. Using everything from Bluetooth beacons to Wi-Fi-connected door locks to allow customer access, many physical assets will become digital services […]. conference rooms, hotel rooms, cars and warehouse bays can themselves report capacity, utilization and availability in real-time. By taking raw capacity and making it easy to be utilized commercially, the IoT can remove barriers to fractionalization of industries that would otherwise be impossible. Assets that were simply too complex to monitor and manage will present business opportunities in the new digital economy. This will present a multitude of opportunities to develop innovative business models based on the new technology!
Robert M. Randall