CIOs are warned against making big bets on ideas.
Speaking at the Unicorns vs Dinosaurs Summit held at the RMB Gallery in Sandton on 24 May, Tendayi Viki, associate partner at Strategyzer, told top leaders that successful innovation is a combination of brain technology, creating customer value, and execution.
A successful innovator, Tendayi said, collaborates with everyone in the business.
He shared a survey from Boston Consulting Group, which found that 75 percent of companies list innovation among their top three priorities, and that 20 percent say they are ready to scale innovation.
Tendayi said there was a gap in innovation because the machinery most companies have is designed for sustaining current success. It is not designed for exploring the future.
The biggest challenge leaders have in driving innovation, Tendayi said, was that they often take the techniques they use to run their core business and use them to make decisions.
According to Tendayi the most fundamental innovation principle businesses should adopt is to invest in a lot of ideas rather than one.
“A number of companies make bets on things that have not been tested. You need to make multiple small bets because only a few of those will become successful,” Tendayi said.
He gave an example of a production company that raised $2 billion to produce a series, and spent $1.75 billion on the project before it was canned in less than a year after its official launch.
He mentioned three reasons why business ideas fail, and these are:
- Making products nobody wants
- Selling products without making profit
- Making profits without scaling.
Tendayi warned that making products that people want does not mean the business will succeed either. “What this means is that business models matter. You have to drive and create value for your company, society and for your customers.”
He told CIOs that in order to succeed in business they need to be able to solve research and development, business and execution.
“Your role is to be part of the ecosystem that drives innovation. You want to create repeatable value,” he said.