Let’s examine two elements of this – then and now.
Peter Drucker in Innovation and Entrepreneurship wrote in 1985 on discovering opportunities. Change in industry and market structure opens up opportunities for innovation, increased revenue and profits.
The “then” scenario to industry or market structure change in 1985 had some indicators that Drucker shared (p 76, 83 to 85).
- Change allows opportunity for innovation.
- “Requires entrepreneurship from every member of the industry.”
- The question, what is our business – should be asked.
- Rapid growth, higher growth than in economy or population which will lead to structure change.
- In rapid growth scenario, the lens for leadership to “define and segment” the market can’t be based on past information, it is historic, no longer valid and the company will miss an opportunity.
- The way business is done is changing rapidly.
What does industry change look like? Drucker examined several industries and the steps of change can run for decades. Drucker looked at Automotive, Securities, American Health Care, Phone Service, Insurance for Art and American Physician Practices. Drucker’s evaluation of change and response covers the period of 1900 to 1985. These same industries continue to change offering up more opportunities for innovation and companies to grow and expand.
For example, if you consider the automobile in 1985 to 2021, what changes in the industry or market are there? A significant change in the automotive industry is technology. Technology is the key advertising concept now versus the past of horsepower, fuel efficiency, style, performance, safety, luxury seats and more.
Another example of an industry or market structure change – steel industry. The past steel manufacturing plants required a significant investment and increased market consumption of steel. In 1965 Nucor entered the steel manufacturing industry and the results were dramatic. Before 1965 Nucor did not produce any steel. Nucor led the mini-mill shift and in 30 years made more profits than any other American Steel Company (Collins, Good to Great, 2001, p 76). In 2021 Nucor continues to improve with the first half earnings in 2021 exceeding the record full year diluted earnings in 2018. In Q3 2021 Nucor is expecting another record quarter.
From Drucker’s guidelines in 1985 are any still valid today for your company? Since we are at the year 2021, what drives industry and market structure change now? How has your industry or market structure changed because of:
Technology
- Internet – dialup to broadband
- Browsers
- Windows
- Wireless
- Digital – many things digital in the past, just no way to move it around the world
- Cloud
- AI
- VR
- IP
- Cyber security, risk, hacks
- Landline, cell phone, smart phone
- Apps
- Media – live streaming, social media
- E-commerce
Operations
- Efficiency, productivity, performance
- Quality
- Global Customer needs
- Global Customer expectations
- Globalization of operations
- Globalization of supply chain
- Global manufacturing
- Remote work
Companies/products
- Retail
- Amazon
- Apple – iPod, iPhone, iPad, Mac
- PC’s – all other manufacturers with Windows, Office
- Additive manufacturing
- Manufacturing 4.0
- All companies are now to a degree technology companies
- Changing business models
- SaaS
What applies to your company, what are the ones missing? Once an opportunity is identified then what? Here is a process collected from various sources.
- Start small across all startup aspects.
- Have a broad approach for ideas, in this case more is better because many will not develop.
- Due diligence.
- Present to an open-minded decision-making group with the CEO as the lead.
- Pilot – go/no go
- Be flexible
- Decisive
- Entrepreneurial in approach
- Right people, right seats
- Defined expectations
- Budget
- Deadlines
- Ensure all necessary technology, knowledge is available, affordable – don’t get cart before the horse, learn from the light bulb invention
- Scale.
- Commercialize – integrate into the existing business, retain some team members from initial phase.
- All of this supported directly by a senior executive.
The existing business and what’s next/innovation are inseparable. The existing business continues to develop within the industry or market structure amidst change. Both the existing business and what’s next/innovation are to support the future. The future is funded by the existing business and by discovering opportunities that will become the existing business of the future through innovation.
How is your company, your employer doing with discovering opportunities, developing to commercialization and the turnover to the existing business operations? This is the fourth in the series of discovering opportunities. The series provides slices of the discovering opportunities pie that should be a focus for every company, large or small, every executive. The entire corporation’s personnel are potential experts to discover opportunities.
The blog series on discovering opportunities is an important aspect for Innovation Advantage’s strategy. While some success is realized, a continued focus remains.
All the best in discovering opportunities. Next up Discovering Opportunities – Demographics.