Platt Perspective on Business and Technology

Meshing innovation, product development and production, marketing and sales as a virtuous cycle 12

Posted in business and convergent technologies, strategy and planning by Timothy Platt on April 5, 2018

This is my 12th installment to a series in which I reconsider cosmetic and innovative change as they impact upon and even fundamentally shape the product design and development, manufacturing, marketing, distribution and sales cycle, and from both the producer and consumer perspectives (see Ubiquitous Computing and Communications – everywhere all the time 2, postings 342 and loosely following for Parts 1-11.)

I positioned the issues of business process innovation (as opposed to market-facing product or service innovation), in a wider context of innovation in general in Part 11, to focus on that particular category of business improvement change and development in a wider context. And then I focused in on the specific area of business-to-business transactions and the processes that would govern them and determine their valuation, and from both participant sides, where that involves the development and possible intentional transfer of such business process developments out of the businesses that they arise in, to other enterprises, as for example in supply chain or related business-to-business collaborative contexts, or through sale as marketable products in their own right.

Then towards the end of that installment, I raised a set of questions and issues that I stated that I would more fully explore here, building from its line of discussion:

• Does a business process innovation of the type that is under consideration here, connect into and directly improve core business processes that are essential to creating the marketable sources of value that the innovating developing business would bring to market, as their unique value proposition?
• Or is this a business process innovation that at least primarily fits into and facilitates more supportive areas of their business, and even just what might traditionally be considered a cost center operation for their business type and for them?

I began addressing these questions there, by at least beginning to posit a cost-benefits analytical approach for determining when it would be best for a business to retain such innovative change in-house and when it might make more sense for that business to in-effect commoditize its business process innovation capabilities by selling or licensing the fruits of their labors in a more marketplace type of arena. (See my six bullet pointed questions, as offered in Part 11, that at least briefly note a few of the key decision making steps that a business management team would more generically face when confronted with this type of choice.)

To be more specific and at least hopefully more clear here, I at least began parsing the overall question of explicitly determining as a cost/benefits and risk management consideration, whether to retain this type of business enabling New in-house and closely so, or whether to market and share such innovation, according to where and how it fits into the developing business and its core business systems that specifically support its fulfilling its business model, or how it fits into its more peripheral and even essentially entirely cost-center areas. My goal here is to step back from that starting point to consider the issues raised here from a fuller and more comprehensive business systems perspective.

I stated at the end of Part 11 that I would do so, at least in part “in terms of markets and marketplace dynamics” as I began doing there, where I raised the question of competitive pressures and how they can, if sufficiently pressing, make it more important to keep any possible value creating edge in-house, and no matter how individually small and incremental it might be, where less immediately pressing direct competition might make such innovation sharing more reasonable. Think of this as a timeframe issue:

• Where returns on investment made in developing such innovations might be more short-term in nature, and particularly if their advancements under consideration are more evolutionary in nature than revolutionary, and their novelty shelf life might be limited at least individually,
• While the cumulative effect of bringing such offerings to market might become significant when considered longer-term.

Let me raise two possible outcomes scenarios here to more fully clarify (complicate) that dual observation:

• A business that keeps developing perhaps simpler, more evolutionary updates to their operational processes that individually only create more minor increases in their capacity to create a stronger competitive position for themselves, might in fact be creating building block pieces that would cumulatively, collectively lead to much more significant overall results for that enterprise. There, the accumulation of the quantitatively small and more minor might come to add up to a qualitatively large and an overall positively significant. The word synergy enters into this narrative here, where individually small, can, when combined add up to offering greater value than would come from the simple sum of their individual component parts. So selling off this source of value piecemeal might not seem all that significant when considered step-by-step for its impact and from a strictly here-and-now short term perspective. But all of this might prove to be much more significant and very justifiably so when considered long-term.
• But even then, this type of piecemeal selling or licensing sharing might still be worthwhile for that innovation developing business, if this also cumulatively positions them as a true leader in their industry and for their marketplace, for their overtly visible innovative strength. And that might particularly hold true if other businesses are simultaneously working on and developing what are essentially those same next evolutionary step innovations, or at least trying to, and the greatest value arising from them might come from how a developing business could market and position themselves as the enterprise that visibly, palpably keeps arriving there first.

Let’s consider the second of those two points in a bit more detail. I am writing here of business systems innovations, and not the more directly-consumer facing innovations of products and services that would be brought to a marketplace. Consumers do in fact tend to focus more on the innovations that businesses bring to the markets that they make their purchases through. And consumers tend to focus primarily on the products and services offered there that would best meet their needs, or at least their desires. But they also look to the providing business too, and certainly when for example, ongoing product support might be a consumer requirement, and the assurance of a providing business’ strength and creative resilience can be taken as a measure of their being able to sustainably fulfill their customers’ needs.

With that noted as necessary background, I switch directions to consider where such business improvement innovations might be marketed and offered, and used to market the value of the providing business as a whole too. I have at least briefly raised in this blog, the issues of businesses competing for inclusion in supply chain systems that would have the best partner businesses in them too, and certainly when participation would not be open-ended and even promiscuously so for key and linchpin business members in them (as for example when bringing in shipping and logistics service providers such as FedEx that take on any and all customer businesses as their own and regardless of how they do or do not compete with each other.) I point out in this still emerging context that supply chain level competition is all but certain to become an increasing important consideration in the coming years and both intra-nationally and internationally, and globally so for that, where at least selective exclusivity and protection from what could become competition-based conflicts of interest would be contractually spelled out and legally binding for all members of a given supply chain system.

I am going to continue this line of discussion in a next series installment where I will discuss contextual pace of change issues, and innovation shelf lives as sources of consideration that would impact upon strategy and its decision making processes here. And I will also discuss all of this in the dynamic and at times less than clear cut context of global flattening as it is taking place in this 21st century, as accompanied by the reactive (if nothing else) global wrinkling and push back that accompanies that. I will at least briefly consider how those types of factors would impact upon business process improvement and innovation, and its retention or transfer that I have been addressing here too.

Meanwhile, you can find this and related postings and series at Business Strategy and Operations – 4, and also at Page 1, Page 2 and Page 3 of that directory. And see also Ubiquitous Computing and Communications – everywhere all the time and its Page 2 continuation.

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

This site uses Akismet to reduce spam. Learn how your comment data is processed.

%d bloggers like this: