Game-changing innovation to gain a competitive edge

06 February 2006

From an innovation standpoint, there are three working models through which an organisation can gain an advantage over its competitors — by driving for performance, through incremental innovations, and by using game-changing innovations. An analogy with the world of Formula One racing is useful in understanding these three working models; using them effectively can make the all the difference between a pole position and a crashed bumper.

The business environment around us is not unlike a Grand Prix — full of fiercely competitive duels, hard fought twists and turns and, sometimes, nail-biting finishes. In a Grand Prix, the race is as much about the larger team as it is about the skill of the driver. The final result is governed by hundreds of people like mechanics, computer specialists, and managers. Similarly, the world of business is undoubtedly a team game — depending as much on how well-organised the enterprise is, as on the skill of the CEO. In fact, the CEO is more like a mechanic than a driver; he ideally seeks to build a vehicle which will find its own direction when it's time to steer.

With this metaphor in mind, the question of getting superior business performance then boils down to - how do you get more out of your car in the long term? You have three options:

First, you can put your foot down on the accelerator.
Putting your foot down is about getting more out of the same system. It is about efficiency, about the driver being told: "All right, this is what we've got in terms of machinery and fuel, now I want you to stretch your limits of performance and drive harder."

That's the attitude commonly seen in industries that compete on cost parameters. There is little else to differentiate them, so they continually strive for efficiency, by heightened quality consciousness and process orientation. Non-adaptive implementation of tools like Six Sigma, CMM levels, and ISO certifications are all targeted at squeezing the last drop of performance out of existing systems.