In the year 2000, Blockbuster (then a giant in the movie rental business) passed up the opportunity to own Netflix for (a now seemingly measly) $50 million due to its belief that its reliance on brick and mortar stores was the right way of doing business. Fast-forward ten years later, Netflix was valued at $13 billion, and Blockbuster filed for bankruptcy. This is just one example out of hundreds of business that didn’t see the need for innovation and ended up suffering for it.
I recently got my hands on the book: “Disrupt: Think the Unthinkable to Spark Transformation in Your Business” by Author, Luke Williams, who is also the founder and Executive Director of W.R. Berkley Innovation Labs; and a Fellow at Frog Design— one of the world’s most influential product strategy and design firms.
According to Williams, “Companies that try to differentiate themselves by focusing on incremental innovation instead of game-changing, disruptive innovation will differentiate themselves right out of business. Companies simply cannot afford to wait until they get backed into a corner”. Companies need to disrupt themselves from within as the only way to transformation – digital or otherwise!
In the book Williams describe disruptive thinking as: “a way of thinking that surprises the market again and again with exciting, unexpected solutions. A way of thinking that produces an unconventional strategy that leaves competitors scrambling to catch up. A way of thinking that turns consumer expectations upside down and takes an industry into its next generation.”
In a local context when I picture disruptive thinking, few companies come to mind. And, you guessed right, Safaricom is one of them – especially when it comes to innovative solutions and strategies which have landed them the title of leading telecommunications service provider in Kenya, controlling 66.3 percent of the market as at September 2015. Safaricom has been able to achieve this thanks to its array of great solutions such as M-pesa and great strategies.
For instance, Safaricom’s news strategy is hedged on integrating the UN Sustainable Development Goals (SDGs) into their business and corporate culture, which according to the company has seen their true Value to the Kenyan society increase by 12% to KES543 billion during its last financial year.
“We assess the significant indirect value contribution we make to the economy, society and environment in Kenya using the KPMG True Value methodology. When monetised, the net value of the most material social, environmental and economic impacts of the company, both positive and negative, gives an indication of the total value that Safaricom creates for the people of Kenya,” said Nicholas Ng’ang’a, Chairman, Safaricom PLC Board.
Transforming the business and thinking innovatively doesn’t always reap expected rewards, to this William says that companies should “Be Wrong at the Start, to be Right at the End”. Safaricom is no stranger to failure, in fact just recently Kenyan Wall Street shared Bob Collymore saying, “Some of the biggest lessons we have learnt in the last year are a result of the failure of products and services such as MPesa 1-tap and Masoko to take off as planned”.
But the true reward comes in the long game as evidenced by M-pesa’s success, the product was launched in 2007 and had to wait until 2018 to go global. A deal made possible through partnerships with more than 500,000 Western Union agents, a number of banks as well as digital money transfer platforms World Remit and HomeSend among others.
“This new service brings the convenience, safety and speed of M-PESA to the rest of the world and will enable Kenyans to send and receive money across the world from the comfort of their mobile phones. M-PESA Global seeks to connect Kenyans to opportunities by making it easy and seamless for them to transact with the world and for the world to transact with Kenyans,” said Sitoyo Lopokoiyit, Chief Financial Services Officer, Safaricom, of the new product.
Only time will tell whether the product shall be deemed a success or not. The key takeaway here is that organisations must try their hand at innovating from within or stand the chance of being left behind by their competitors. Join us at the upcoming CIO100 Symposium and awards next week as this topic is expounded on further by Vimal Shah, Chairman, Bidco Oil Refineries.