These initial articles were inspired from my thesis on Proptech and its potential as a disruptor and innovator in Johannesburg, South Africa. Should you be interested in reading the thesis click on the link below:
What is strategic innovation? Well it is a strategy that involves innovation, rather than merely project-based view targeting singular events. Strategic innovation is entrenched in an organisation’s strategy that impacts finances, operations, people and business models (to name a few). Key functions involve on-going learning and entrenching continuous sensing and seizing activities leading to transformation.
Strategic innovation is a complex mix of strategic thinking, coupled with specific views based on innovation needs. Make sense? If you are new to this and doubtful let me explain.
Let’s start off with some theory on Strategy! Now there are multiple different theories, models and frameworks all trying to understand the complexities of Strategy and Innovation in their own right, throw them together and well, you have a mash up of the Beatles and Billie Eilish. Here are some models to help you get to the line.
The Unique Competing Space is a great example of what the world of strategy is all about. The figure below shows the three main spheres that determine an organisations competitive advantage. The crux of the model (as indicated below) involves beefing up you internal resources and capabilities (the bottom circle) to target client needs and success factors (circle on the right), while creating a unique competing space (the orange bit) while avoiding the contested space drawing its power from the competitor capabilities (circle on the left).
The image below represents the UCS as provided by Tovstiga:
As an introductory article we will only touch on certain key points, but rest assured the full explanations will follow soon.
At the heart of this thinking lies the Resource Based View (RBV). When talking about innovation we see that whilst these frameworks and models do align, there are some conflicts. Que what Teece and many other authors refer to as the Dynamic Capabilities View (DCV). In short, the DCV focusses on how to get the existing resources (RBV) to ultimately transform the business model (sensing, seizing and transforming). The DCV is therefore the means in which the bottom circle is able to undergo change, attracting new or adapting consumer needs while leaving the competitors in your dust (best case scenario).
The innovation segment looks at the different types of innovation that can be adopted. To keep it simple for now we will refer to incremental and radical innovation. The former is slow and steady innovation and the later has coined the term of quick change in business model or attracting new or developing market segment needs. These are VERY broad definitions but the key point here is that you are not limited to choosing either or, as many organisations believe. You are able to use different types of innovation dependent on a variety of factors which will be discussed in detail in one of our new posts coming soon. In fact thinking on strategic lines, you will apply both over different time frames to ensure on-going transformation, obviously in certain instances.
Strategic innovation is therefore tying together general strategy and making space for innovation to exist together with financial, operational and other targets one might have. It is this basic understanding that needs to be ironed out before one embarks on discovering whether technology and innovation can make a change to your current business. It also helps identify where potential lack of understanding may exist, enabling bias to stifle growth in favour of traditional ways. It is not the act of choosing traditional means over innovative ones that is the problem, but rather the act of ignoring the latter in favour of the comforts of the former. Deliberate decision making needs to challenge organisations to make the right decisions for the on-going survival of their organisation.
While we will be discussing strategic innovation and what it is, together with the different models, theories, frameworks and views discussed above, we can agree that strategic innovation is not throwing money at innovation projects without a plan. Fail fast is not a strategy and is a misquoted statement as indicated by Jamie Pride in Unicorn Tears (recommended book as an interesting read especially for start-ups). Jamie shows that the fallacy of starting a business based on no plan at all is a mythical creature that needs to be vanquished to avoid the abhorrent failure rate of start-ups, especially those championing innovation.
Your first thoughts might be, “well what does this have to do with Proptech?” My answer: Everything. Proptech and multiple new initiatives are being thrust forward to change the property landscape. Can this be done without understanding the ever-growing nature of innovation and technology singularly and in conjunction? It is therefore my aim to show you how this thinking acts as an audit for your organisation’s current capabilities and focus, and the theoretical discussions shown to enable the first steps towards this adaption.
As a side note, the articles used as a backbone to the discussions can be found in my reference list in my thesis document. At no stage do I purport to be the originator of these theories or concepts. Where any document is being mentioned outside of my thesis, I will make sure to reference the author and the article in the post itself.
#proptechtalk 