Businesses across the board need to do more with less, so how do you continue to grow when things are tight?According to Preetesh Sewraj, founder of Product of the Year South Africa, the answer lies in efficient R&D and affordable innovation.TARGETED GROWTH“Innovative growth isn’t organic,” says Sewraj.
“In boom periods, organic growth is fine, but when the economy is under pressure, your business needs something more. Growth won’t happen without input.“There are two ways to introduce innovations to your business. First, if your business has some disposable income you can focus on local acquisition.
Find a business that’s smaller than you, perhaps even a start-up, but whose products or services will bring innovation to your business and client offerings.“If local acquisition isn’t an option, you need to find ways to put products out to market quickly with the smallest cost to your company.
The goal is always higher margins — growth that comes with higher operating costs and possibly even lower margins only makes sense if there are real long-term wins on the horizon, otherwise you’re just growing for the sake of growing, and not doing your business any favors.”
So, how do you get more efficient with your R&D, and get the returns you need? “Take risks,” says Sewraj.“One of my favourite Elon Musk quotes is: ‘Go out and take risks now. You’ll never regret it.’ I really believe in that mindset. The secret is to take calculated risks though.
Do the research.Immerse yourself in your category. Understand what other companies are doing. Learn from the best. Companies that get too used to their products and successes stop innovating, which is how Nokia, Kodak and Facit lost their positions as market leaders.
“Apple has done the exact opposite. Apple is willing to cannibalise its own products. The iPod was the biggest product Apple had, and launching the iPhone was a big risk — but it paid off. It propelled the business further.
“The real secret to innovation isn’t just that anyone can do it, but that many big businesses have — and you can learn from them.”According to Sewraj, here are four key areas to focus on if innovation is your aim — without breaking the budget.
1 Look at what’s working globally What markets are similar to yours?
How can you apply what they’re doing successfully at a local level? What are similar global companies doing? Find businesses that are similar to yours, but operating elsewhere, and evaluate their areas of growth.
Can you apply those lessons here? You should also watch global trends. Focus on markets that are psycho-graphically similar to South Africa.
Products and services that do well in those regions should do well here. For example, when I was at Proctor & Gamble, we knew that adverts that worked in the UK and Malaysia would also work here, because our economies and consumers are similar.
2 Immerse yourself in your category
Research your category locally and in other markets. This is how I brought Product of the Year to South Africa.I totally immersed myself in the category until I knew exactly what other companies were doing in different markets; what worked, what didn’t work and so on.
3 Find new technology
The more you understand your category and are paying attention to global trends, the more likely you are to spot new tech that’s synergistic to your business.
Technology today is far more affordable than ever before, and it’s amortized really quickly, which means after the initial cost outlay, you should see an improvement on your margins. Also, your competitors are becoming more technologically sophisticated. You want to lead, not lag behind.
4 Tap into the psyche of your market
What do your customers care about? What do they need? Be mindful of the experience that’s in tune with your customers’ thinking. People waiting in a doctor’s rooms will appreciate medical information that’s relevant to them and easy to understand. They probably won’t appreciate a clown show, because it’s at complete odds with their expectations in that context.
STRETCH YOUR BRAND FOOT PRINT A great growth path is to stretch your brand footprint. “You already have a core business and a footprint, so where can you logically stretch that footprint? Learn from the companies that have invested a lot in research, have the cash to try new things, and are multinational.“For example, Dettol used to be a brown liquid disinfectant.
That’s it. When they were looking for growth opportunities, they asked this key question: What are we all about? What’s our heart and soul? The answer was simple: We kill germs. So, where else do people want to kill germs? Again, the answer seemed obvious.
Personal hygiene is all about killing germs. And so Dettol stretched its footprint into body washes, hand washes and deodorants. The move was all the easier because the brand was already trusted and synonymous with killing germs.
From there, it was able to move into home products.“Just be careful when planning your expansion: If Dettol had created home products first, it’s unlikely it would have had success in personal hygiene.
No one wants to associate a floor cleaner with their deodorant. Moving from personal hygiene into home products on the other hand was a smooth transition.”