Tequila, Avocados & Custom Chinos: Innovative Approaches to Growth
Sensing the untapped potential in the tequila market, Diageo made headlines last week with the $1B purchase of Casamigos, the fast-growing brand George Clooney and Randy Gerber created just four years ago. The previous week Jeff Bezos turned the retail industry upside down with the purchase of Whole Foods. Almost lost in the business pages the same day, Wal-Mart announced the acquisition of e-tailer Bonobos. What’s going on?
Ask any colleague where innovation exists within your company and you’re likely to hear about the people, processes or functions responsible for creating new products or services. But in a business world consumed by disruption, innovation is a behavior that should exist at all levels of the organization.
Nowhere is this more true than at the C-Suite, where some of today’s most forward-thinking leaders are being as lateral-minded in finding a solution to growth outside of their company, as their Innovation teams are in creating one from within.This is about the executive ranks thinking and acting with the creativity and agility of an entrepreneur, and being willing to pivot and then pounce when the timing is right.
- Having dominated the physical retail landscape, Wal-Mart found itself challenged with the virtual one, and is now taking the more innovative approach of getting into bed with digital-first brands. The recent purchase of Bonobos is less about getting nice chinos to guys across America, and more about innovating a way-in to an affluent target that Wal-Mart has been missing out on. According to Marc Lore, head of e-commerce for Wal-Mart: “It’s another rung in our strategy of moving fast”.
- Conversely, Amazon’s incredible e-commerce strength couldn’t help it hurdle the challenges of fresh food delivery. The more innovative strategy lay in the acquisition of physical stores in desirable urban locations that can serve as distribution centers — so when Whole Foods’ growth slowed, and investors grew more restless, Jeff Bezos seized on the opportunity to innovate outside of its mighty warehouse walls.
So what can leaders do to bring a more innovative approach to external growth at their company?
- Stop before you shop
Too often when faced with mounting investor pressure, companies rush to buy or partner their way to growth before they have identified the issue and insight that will unlock it. Just like any successful innovation from within, an innovative approach to external growth starts with a deeper understanding of the consumer/market “why”, before you solve it with the “what”.
- Swap the boardroom for the garage
What made your company successful in the old paradigm may not be what will help you succeed in today’s disrupted world. Free yourself from existing parameters (mental or actual) by putting your head in the mind of an entrepreneur, and asking yourself what would you do if you were to start the business from scratch.
- Set everyone’s radar to always-on
When you’re deeply entrenched in the challenges of running a business, it can be hard to scan further afield for more innovative solutions that may provide a smarter path to growth. Actively enlist those around you — your teams, your partners, your network — to always be on the look-out for potential suitors and partners that could bring something new to the table.
- It’s ok to wobble before striding
The entrepreneur doesn’t expect to get it right first off, every time. Rather she incubates and experiments her way to success. When partnering or buying, look for opportunities to try things out for size and allow your business the runway to iterate your way to success.
- Innovate for people, not just profit
An innovative approach to growth lives on after a purchase or partnership. While a lot of the commercial wiring might have been done in the deal, the hard work of culture-fusing an innovative new business or partnership so that it feels like family, is often what will make or break an externally-derived solution for long term growth.
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