The outrigger – revisited
By Roger La Salle
Being bold has risks
In a blog about a year ago we referred to the “outrigger model”. This is where a company with a recognised brand may wish to explore new spaces, but do so without risking its brand name by potentially backing a “dud”.
Exploring new horizons, especially in today’s fast moving world is essential. Indeed research has well shown that the rate of innovation or perhaps product “churn” is a strong indicator of revenue and profit growth. One needs only look at Apple to see this with virtually none of their products more than two years old.
I was reminded of this this week in a conference where KODAK’s folly in dismissing digital photography as a “nothing” was being discussed. It’s easy in hindsight, but perhaps a smarter move would have been for KODAK to create a separate entity, divorced from its brand and allow some budding entrepreneurs to explore the opportunity. Then if it works and represents new business, that’s the time to bring it home and give if the power of the “mothership” brand.
There are other benefits as well
The case of IBM using this model to explore the idea of a desk top computer worked perfectly. If it had been a fad, the IBM brand would have been untarnished. Nothing lost there.
However, what IBM claims was another great advantage was that being divorced from IBM, not even telephone connections, the new fledgling business was free of the inertia of big brother! An inertia that would have questioned every step of the way and slowed the development from the 12 months it actually took, to an estimated ten years.
Nothing stands still these days. For example, companies that build platforms on 2G, 3G or even 4G technologies will soon be rendered obsolete by the march of technology and ever changing codes and protocols. Change is ongoing and accelerating.
In the world of tangibles things are also changing. Power generation, ever growing and tightening OH&S requirements demanding improved safety apparatus, vehicle designs, digital disruption and technologies in universities we have yet to see but will soon likely emerge are all game changers.
The outrigger model works well, but so too do innovation, design and research centres we are not even aware of that are often buried deep within the walls of major companies. The 3M labs are just one of the few well known such centres.
What’s the lesson?
As business managers perhaps there are several things we need to be alert to:
• Don’t be afraid to ditch dying products and ways. Selling obsolescent products is a distraction that damages your brand
• Forever explore news ways of doing whatever it is you do. Understand your business must evolve or expire, there are no options
• Fund an entrepreneur in an outrigger to explore a new business initiative. Keen young entrepreneurs will work 24/7 on a shoestring budget.
In short, keep moving or somebody will pass you, that’s a given.
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Roger La Salle, trains people in innovation, marketing and the new emerging art of Opportunity Capture. “Matrix Thinking”™ is now used in organizations in more than 29 countries. He is sought after as a speaker on Innovation, Opportunity and Business Development, is the author of four books, and a Director and former CEO of the Innovation Centre of Victoria (INNOVIC) as well as a number of companies, both in Australia and overseas. He has been responsible for a number of successful technology start-ups and in 2004 was a regular panellist on the ABC New Inventors TV program. In 2005 he was appointed to the “Chair of Innovation” at “The Queens University” in Belfast.