This blog first appeared as Steve Wunker's piece for Forbes
By Steve Wunker
Sony’s drive for reinvention is admirable, yet sad. Recognizing that the one-time inventor of massive industries has lost its way, the company has taken to sponsoring massive idea competitions in which hundreds of teams may pitch concepts and ten winners might emerge. Sony’s search for ideas in a bottom-up way is leading it to process data from drones, build online education platforms, and enter the world of online real estate brokerage. Results? Scant.
The drive for ideas, often through competitions, is one of the most wrong-headed notions we see in innovation programs. Inspired by TV shows such as Shark Tank or Dragon’s Den, and attracted by the drama of pitching ideas to a large room, executives suggest these activities as a way to find something – anything – that will provide an exciting route to growth.
Why is this approach so flawed?
There is a much better way to rejuvenate. Growth platforms create the foundation for a slew of ideas that are mutually reinforcing and self-sustaining. In contrast to Sony, consider Samsung, which has staked mobility as its key growth platform for the future. The platform extends well beyond smartphones and includes low-power microprocessors and high-resolution, low-power displays. Unlike so many smartphone manufacturers that struggle to differentiate their hardware, Samsung gets first crack at technologies such as its Super AMOLED screens. New growth ventures, like the smartwatch, tie in.
This thinking can go well beyond smartphones. LG struggled in that business, and it has now doubled down on another growth platform – high-end OLED screens. As the only manufacturer to master the black art of producing these screens in high volumes, it has created a platform to become a dominant TV producer in the coming years, providing it a powerful means of accessing the living room. Going beyond technology, Philips has created a growth platform in beauty, launching innovations such as home microdermabrasion kits and laser hair removal devices that leverage a consumer brand it is building in this business as well as critical sales channels. In another vein, Shell has chosen to become a leading developer of remote deposits of natural gas, creating innovations such as ship-based liquification of gas to make these fields viable.
Samsung, LG, Philips, and Shell all have coherence to their growth platforms. They are rooted in deeply understood market needs and reflect a thoughtful view about where the company can win over the long term. Sony’s ventures in drones, education, and real estate lack that coherence.
Good growth platforms also have longevity. If individual ideas fail – as they often do – the platform provides a means of continuing to innovate against the same market needs. The market understanding and strategy underlying the platform help to set priorities among those innovation investments and to protect these efforts against the forces in the company that seek to shift attention from speculative, future-oriented ventures to hear-and-now firefighting. Plus, the growth platforms build long-term competency in chosen fields through influencing recruitment, project staffing, promotion, and culture. These achievements are sticky, even if individual ideas are not.
This isn’t to say that companies shouldn’t be open to ideas from unusual sources, or that they should squelch any attempt to harvest ideas from throughout the organization. But these efforts need to be linked to a growth platform, with some basis in market understanding, strategy, and prioritization. Otherwise they will spin wheels futilely.
To establish a growth platform, begin with identifying market needs. What are the underlying jobs that customers are trying to get done, and where do those produce overarching, long-term areas of demand in which your company can win? What would establishing a long-term growth platform in one of these areas require, in terms of financial and human resources? Then, think about what that might mean organizationally – can these opportunities be exploited by your core business, should they be incubated and then mainstreamed, or should they be hived off as a completely distinct effort? Once you have this foundation established, go ahead and cast the net widely for ideas.
Sony looks to be headed for further struggles ahead. Its rivals with real growth platforms are positioned quite distinctly. Growth platforms create a manageable number of options for the future. They tie in with the company’s competencies, might link to existing business units, and can be built into significant businesses. What are yours?