By Fundisile Serame
Much has been written about innovation as a cornerstone of business growth and key strategy for competitive advantage, so there is no need to belabor the point. Yet, innovations measured in concrete outcomes that reach the streets and the balance sheets remain elusive to many big businesses and startups alike. There continues to persist an absurdly high rate of mission-critical innovation initiatives that culminate into visions that are lovely to think about, but doable and profitable only in some remote, imaginary world – which Mark Payne, the founder of Fahrenheit 212, calls ‘unicorns’ in his book ‘How to kill a unicorn’.
The lion’s share of corporate innovation projects (over 90%) are not making it to markets. This is according to 45% of 100 chief innovation officers surveyed by Fahrenheit 212, a global innovation consulting firm, in 2014. So, why are firms struggling to transform ideas into commercial outputs? Why is there such low rate of innovation productivity?
Given that mobile technology and social media have have been major drivers of innovation across industries in the last decade, one might expect technology companies to be leading their more traditional counterparts who have used these technologies to penetrate and retain markets. Telecoms companies in particular, facing slow growth, have registered little success in global innovation compared to non-tech counterparts. Five of the top ten global innovative companies in 2015 are nontech companies, according to BCG (2015) survey. On the entire list of 50 companies, 38 (76%) are nontech companies.
It is certainly not for lack of trying that large firms always have to play ‘catch-up’ with start-up driven innovations. In Boston Consulting Group’s tenth annual global survey of the state of innovation, for instance, 79% of respondents ranked innovation as a top-three priority at their company – the highest percentage since the annual survey began in 2005. Neither should it just be expected that companies that show innovation aspirations in their business will get it right by blindly following what successful innovators are doing right. To suggest that there is a general shortage of ground-breaking ideas that can take these firms to new heights would be misleading. What is clear from evidence that has emerged in recent years points to a lack of a systematic approach towards managing innovation efforts.
The reality is that great ideas can come from anyone within and outside the business. Sourcing from outside the organization may involve customers, business partners and, more importantly, leverging an existing entrepreneurship ecosystem. However, great ideas are not enough. There are often fewer barriers to idea generation than idea implementation. Generating ‘great’ ideas can be so empowering that it is easy to get lost in the euphoria of it all and to celebrate ‘failures’. But innovation is not just a ‘feel-good’ exercise. How these ideas are validated and channelled through the organisation to see the light of day is the essence of innovation success, which many firms are grappling with. In many organisations, innovation processes in place are so broken that the excitement that comes with the idea of creating ‘new’ value tends to overshadow the importance of modelling the process and managing the value chain – and that is a management issue.
According to Wazoku, a company that provides innovation management platform and services, effective innovation management requires three things: a defined process model, a focus on innovation, and the right tools to manage. Managers do not exclusively have ideas that would ‘shake-up’ markets the same way disruptive innovations like Uber and others have done in recent years. Innovation is a cross-functional and multi-disciplinary activity that is collaborative in nature.
However, regardeless of the innovation management model an organisation adopts, creating an innovative organisation is the responsibility of management – be it top management team or a subset of it. Executives, as leaders of organisations, need to both inspire and manage innovation efforts. According to Swedish Innovation Management.se, leaders have dual roles when managing innovation, i.e. they stimulate innovative results as they facilitate ideas and initiatives coming from individuals and teams in a bottom-up model whereas they are the primary means for the organization to realize its innovation goals and strategies in a top-down approach. A fundamental challenge is to balance these two roles.
For leaders to succeed in managing innovation there are certain attributes that have proven to underpin innovation success. BCG, in its 2015 survey of global innovative companies, found that many executives identify as critical and interrelated an emphasis on speed, well-run (and very often lean) Research & Development (R&D) processes, the use of technological platforms, and the systematic exploration of adjacent markets. Speed in execution and adoption of new technologies is the major source of differentiation for true breakthough innovators while R&D processes significantly influence the pace of innovation. At least the top 15 global innovative companies, Apple and Google holding the top two spots, are all strongly associated with many of those capabilities. Excellence in the systematic pursuit of these adjacencies is a characteristic common to the most innovative companies.
With that said, an assumption that all organizations face the same obstacles to developing new products, services, or business ventures is a fallacy. The reality is that challenges to innovation vary from firm to firm, and what works for one company may not apply in another’s situation even if they operate in the same industry. Innovation ‘best practices’ are not always ‘importable’ into a company because of the uniqueness of obstacles and challenges to developing new products and services faced by organizations. One company may be great at generating ideas, but lack the discipline to bring those ideas to market. Likewise, a company that excells in excecution, may not have have the ability to source, screen or even decide on high-impact ideas, let alone measure their innovation efforts. Although innovation is messy, fuzzy and complex by its very nature, there is a case for a deliberate and systematic innovation management method that goes from ideas to commercially valuable outcomes. Such a method needs to consider a company’s uniqueness in processes, management and culture.
So, how do firms keep their innovation management processes efficient? Morten & Birkinshaw (2007), in the Harvard Business Review offer the ‘Innovation Value Chain’ framework to address just that. The Innovation Value Chain is a framework for considering existing processes to creating innovations, suggesting that the process of transforming ideas into commerical outputs needs to be viewed as an integrated flow, similar to Michael Porter’s value chain for transforming raw materials into finished goods. The Framework challenges executives to take an end-to-end view of their innovation offorts as opposed to reflexively importing innovation practices which only address a part and not the entire value chain, to ensure all weakest innovation links are addressed.
In the framework, innovation is viewed as a sequential, three-phase process that involves idea generation, idea development, and the diffusion of developed concepts. There are six critical tasks that managers must perform in all the phases, each being a link in the chain, i.e. internal sourcing, cross-unit sourcing, external sourcing, selection, development, and companywide spread of the idea. Along the innovation value chain, firms need to find the strongest links (activities it excels in) and weakest links (activities it struggles with).
This is not to suggest that innovation management gets easier with a framework in place, nor does it seek to bring a hierarchical chain of command similar to that of normal business operations in corporates as this can stifle innovation. The point is, regardless of the framework a firm adopts, there needs to be some application of a deliberate and systematically tailored end-to-end approach to generating, converting, and diffusing ideas that brings sanity to the madness of innovation.
Why invest for the future
AN investment plan forms a critical pillar of a financial plan, says Tokiso Nthebe, a local author and financial services adviser.
Nthebe, the founder of TKO Financial Wellness and Advisory, says when people invest, they can use their money to buy assets that will increase in value over the long term.
He says these assets can help them build wealth.
“When you invest, your money starts to work for you by providing returns that will beat inflation,’’ Nthebe says.
Nthebe says there is a huge difference between saving and investing.
He says investing requires that you take some level of risk in exchange for an expected return or growth.
Nthebe says Basotho should consider many factors before they decide to start investing.
“It is important to have a clear strategy that guides your investment decisions and to work with qualified professionals,” he says.
Nthebe says one should consider their growth mind-set, investment goals, and their risk tolerance.
In addition, one should consider what kind of growth or return they expect.
He says one should find out whether the institution they invest in is licensed or regulated and how long one should invest.
Nthebe says one should further consider what risks are associated with the investment option and whether there are any associated costs.
He says it is also important to remember that investments take time.
“There are no short cuts to building wealth. Do not fall prey to get-rich-quick schemes,” he says.
Moreover, Nthebe says the investment landscape comprises commercial banks, asset management companies, and insurance companies.
He says each provides different financial products and services.
Nthebe says the Central Bank of Lesotho (CBL) also offers investment solutions such as treasury bills and treasury bonds that Basotho can consider.
Depending on your investment goals, he says financial service providers have a wide range of investment solutions to choose from that cater for short, medium, and long-term goals.
“I encourage Basotho to do thorough research and seek professional advice before making financial decisions,” he says.
Vince Shorb, the United States National Financial Educators Council CEO, writes that “many of the financial problems people face today started when they were young and making their first financial decisions”.
Shorb further says taking on too much debt, not investing early, and failing to plan can take one decades to recover from such.
However, it takes financial literacy to make good decisions, he says.
Financial literacy has been perceived as a tool that gives you the opportunity to be confident and empowered to live the quality of life you have worked hard for.
Shorb says one of the wisest decisions one can make to prepare for the future is to invest.
Investment has been defined as the commitment of funds with a view to minimising risk and safeguarding capital while earning a return.
When Covid-19 hit and the government shut down all gatherings in April 2020, there seemed no way out for ICONICS (Pty) Ltd, a budding events management company based in Leribe district.
They had two options: shut down or innovate to keep the business going.
They chose the latter.
Three years down the line, ICONICS (Pty) Ltd has completely transformed itself from an events management and public relations company into a manufacturing company that is now the envy of Lesotho.
“The closing of events translated into the closing of our business,” Rapitso Mosebetsi, one of the co-founders of ICONICS (Pty) Ltd told thepost this week.
Mosebetsi established ICONICS in partnership with Tumo Mahapa.
Faced with collapse, Mosebetsi say they began buying Personal Protection Equipment (PPE) such as surgical gowns, disposal coveralls and safety apparel for resale.
Eventually they decided to manufacture the PPEs and safety clothing. That was the turning point.
But since the company was already down, Mosebetsi says diversification was a hard nut to crack.
“It became quite a long journey (for us),” he says. “We had to come up with something new for the industry.”
He says they had to overcome stiff competition from giant companies and come up with something unique that would set them apart.
“That was how thermal heating apparel was born,” he says.
“We are the first company to produce thermal heating apparel,” he says.
The company manufactures thermal clothing, which is electric clothing, using power banks of five voltages.
“The voltage is so low to electrocute a person,” he says.
The clothing also has a power button to turn it on and off.
Mosebetsi says the thermal heating apparel is on corporate clothing as well as high-visibility clothing.
Mosebetsi says they started the journey with the support of several organisations, such as the Lesotho National Development Corporation (LNDC) and the Basotho Enterprises Development Corporation (BEDCO), to build their capacity.
Mosebetsi says they also got mentorship support from organisations such as the Global Entrepreneurship Network.
The results of years of hard work are now all out for everyone to see.
In 2022, ICONICS won the M100 000 Business Plan Competition hosted by BEDCO.
This grant enabled them to acquire land and buy five more industrial machines.
This did not only enable the company to increase their production to 100 worksuits a week, but it further created permanent jobs for five people as well as three temporary workers.
Last year, the company took part in the Exporter of the Year event hosted by the LNDC in partnership with the Lesotho Post Bank and the United States Agency for International Development (USAID).
Mosebetsi says they won the award for Lesotho’s most innovative and versatile exporter.
He says this did not only put them in the spotlight, but it further encouraged them to do more.
ICONICS was announced as the best exporter of the year at an event hosted by the LNDC earlier this month.
Mosebetsi says this made them proud, as the award is aligned with their vision.
The award further gives the company an opportunity to participate in the regional competition.
He says this opportunity will further give the company a competitive edge in terms of production locally and globally.
“It will be an honour if we can win the regional competition,” he says.
In terms of markets, Mosebetsi says the company has had the opportunity to list their products in the African Trade Market since 2020 with the support of USAID.
This is an e-commerce platform that opens up the market for African countries to list their products.
Mosebetsi says the company did not only get publicity, but the client database also increased.
He says they moved from supplying individuals only to big companies, different organisations, and different government departments such as those involved in mining and health.
Considering the decline of the Lesotho textile industry, Mosebetsi says their secret to success has been their being innovative.
“Our sustainability is matched with innovation,” he says.
Mosebetsi says it also requires patience coupled with lots of investment in terms of time.
“Rome was not built in one day,” he says.
He says working as a team also plays a critical role.
Despite their achievements, Mosebetsi says the market for innovative industries is one of the hardest nuts to crack.
He says the company is in the process of not only making their products known but also educating people about their safety.
Mosebetsi says the other challenge is the decline of the South African Rand as compared to the US Dollar.
He says some of their materials are sourced from China.
Therefore, it is more expensive to buy such materials.
ICONICS is not only seeking to make their brand well known globally, but Mosebetsi says they are also seeking to create more jobs for our youths.
LetsGo and Win!
LETSHEGO Financial Service has launched the LetsGo and Win loan consolidation campaign where customers win weekly and monthly cash prizes of up to M150 000.
The campaign, which was launched yesterday, will end on November 8.
The LetsGo and Win campaign rewards customers for consolidating their loans.
It is aligned with Letshego Lesotho’s version to offer competitive products that cater for the evolving needs of its customers.
The financial services company operates in Lesotho, Botswana, ESwatini, and Zambia.
The Marketing Manager and Business Partner, Tšotetsi Seema, said Letshego Lesotho is committed to delivering increasing value and options to customers.
Seema said this programme is a testament to that commitment.
“The campaign invites customers to consolidate their loans into one low and easy repayment with reduced rates and they stand to win weekly and monthly prizes,” Seema said.
“The weekly cash prizes will be won by lucky customers randomly selected and notified through Letshego Radio shows,” he said.
Additionally, he said two lucky customers will be randomly selected each month and given a chance to spin the wheel of fortune with a chance to receive a maximum of M20 000 each.
“The loans consolidation campaign makes it easier for customers to choose Letshego Lesotho as their preferred financial services partner.”
He said this innovative campaign aims to help individuals streamline their debt payment while benefiting from reduced interest rates.
“Debt consolidation can help customers get a lower monthly payment, pay off their debt sooner, increase their credit score and simplify their life.”
Letshego Lesotho’s Head of Sales, Distribution and Marketing, Motebang Moeketsi, said managing multiple loans can often be overwhelming with varying interest loans due dates and terms.
“The campaign addresses this challenge by combining multiple loans into a single, easy to manage repayment plan,” Moeketsi said.
He added that this simplification not only eases the financial burden on borrowers but also potentially leads to significant savings over time.
Moreover the new consolidation campaign invites customers to take advantage of their best-in-class financial services provided through Letshego Lesotho branch network and digital platforms.
“Letshego Lesotho is committed to increasing financial inclusion through its efforts to serve underbanked communities, promoting financial literacy and delivering positive social impacts for its customers and communities.”
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