“Collanovation is a strategy, an innovative synergy that comes out of collaborative effort. Collanovation is about joining forces with others, leveraging on individual strengths to combine to produce a superior product.”
By Shola Ajani
Compete, Concede or Innovate? This is a question every entrepreneur and business leader would have to face and answer in the course of their pursuit.
Do I concede?
To concede is to give up and many have done just that this past year.
Do I Compete?
I say to clients, it is suicidal to compete head on with a market leader. If we look at Coca Cola it is the runaway leader as the “best cola drink”. Pepsi would debate that vigorously because a blind test carried out in America actually showed that Pepsi Tastes better, but who cares? Coke Cola is synonymous with Cola Drink. Ask for a soft drink and the chances are you will be offered a bottle of Coke or another product from the Coca Cola range.
With such market goodwill and brand identity, why on earth would you want to invest millions of dollars starting a soft drink company producing Cola drinks? I had a client once who had such grandiose dreams, he believed so much in his product. As we speak his premises has been let out to a Church; perhaps that produces a more steady income.
Having said that, should you simply concede the number one spot in your industry?
The legendary Jack Welsh of GE said “if they can’t be No 1 in our market, at least we must be No 2”.
You can settle to be number 2, if you can’t beat the leader.
Market Segmentation
Another option open to you is to develop a segment of the market. A market segment is a classification of potential private or corporate customers by one or more characteristics, in order to identify groups of customers, who have similar needs and demand similar products and/or services concerning the recognized qualities of these products.
Examples of characteristics used for segmentation:
- Gender
- Price
- Interests
- Location
- Religion
- Income
- Size of Household
A good example is the telecommunication industry in Nigeria. When Etisalat came on the scene, it targeted the youth and carefully designed product that met the needs of the youth. Likewise Glo had to introduce a new payment tariff to gain their share of the market.
Before Glo came on the scene, paying per second was nonexistent. Glo introduced this tariff and others had to follow suit. In the minds of consumers, Glo is not necessarily the market leader, but the brand led the market with a new pricing strategy.
SWOT Analysis
Needless to say, before you enter a market study it carefully, carry out your research and conduct a SWOT Analysis. You will identify the weaknesses and opportunities of the market leaders, which in itself is an open door for your product.
Another example that clearly comes to mind is the Banking Industry in Nigeria. In the past, banking was a whole day exercise; you practically had to dedicate a whole day to do your banking. But innovations introduced by the likes of GTB have reduce the length of time you spend in the banking hall.
Of course, it was unheard of to spend less than 15 minutes in a bank. GTB and the “New Generation Banks” became a runaway success. They couldn’t compete head on with the likes of First Bank Nigeria but competed on different terms, their own terms- excellent customer service.
Innovation
So much has been written about this subject; what exactly is Innovation?
Innovation is the creation of a more effective products, processes, services, technologies, or ideas that are accepted by markets, governments, and society. Innovation differs from invention. Innovation refers to the use of a new idea or method, whereas invention refers more directly to the creation of the idea or method itself.
In essence innovation is doing things better. The history of computers is one of innovation; from the main frame computers that required a house to store to the desktop and now the hand held computers.
Notice that Apple that produced the iPad is not the original inventor of computers. Innovation is simply looking at a product and coming up with better, faster and cheaper solution.
By being innovative you can become a market leader within a market. Innovation is the key. Product innovation is the creation and subsequent introduction of a good or service that is either new or improved on previous goods or services of its kind. This is broader than the normally accepted definition of innovation to include invention of new products that in this context are still considered innovative.
Innovators lead in their market; many company’s who were pioneers in their market have lost their first movers advantage simply because they refuse to innovate and change with the times. Any serious business about surviving in a fast paced market must make things happen…to refuse to innovate is to die.
In the words of my mentor, Dr Sola Oludoyi, as a leader “try repeating the same thing, the same way, day in, day out and see how many followers you have left following you”
Collanovation
Extending this a bit further is what I call Collanovation. Business from living memory, has evolved and thrived on the idea that it’s your competitive superiority that enables you succeed in the market. I beg to differ and in the process submit that Competition is overrated! In comes Collanovation, a new way of doing business.
Collanovation is a strategy, an innovative synergy that comes out of collaborative effort. Collanovation is about joining forces with others, leveraging on individual strengths to combine to produce a superior product.
Collonovation is about leveraging on individual strengths and capabilities, while recognising that success may not be attainable alone. It is useful in new market entry, challenging market leaders, continuous improvement, growth strategy, etc.
Collanovation is also the way to go for organisations to retain leadership position and remain at the cutting edge of innovation and delivery! Where applied, the principles of collanovation, where there are no single winners; everyone is a winner! Collanovation discourages unhealthy rivalry but creates atmosphere for unhindered creativity because you are leveraging on multiple capabilities.
Collanovation is an aggregation of innovators. Also lesser known brands can produce superior products (collanovate) to become a threat to leading brands.
Mergers between 2 leading brands can be a form of collanovation; two competing firms risk dissipating energy and actually death, they risk losing market leadership due to competition between them. True David brought down Goliath! But how many times does one David bring down a Goliath? Several Davids can certainly bring down a Goliath; that is Collanovation.
So what then is Collaboration?
In colloaboration you are sometimes forced to work together with others; in collanovation it’s a conscious decision to work with others. For emphasis, collaboration is joining forces, which need not produce result; Collanovation is partnering with others to produce innovations. It’s a conscious and purposeful decision to work together to bring about innovation.
Collanovation is purpose driven innovation; combining and leveraging on individual strengths with the INTENTION of producing a new product.
Is Competition then Bad?
Competition dilutes market share, hence you have one clear winner and several struggling brands; collanovation produces groups of winners.
Business history is littered with the carcass of once promising companies destroyed by competition. Competition is overrated! Two competing firms risk dissipating energy and actually death, they risk losing market leadership due to competition between them.
Leaders’ Can Also Do It
Collanovation is not just for the small players.
America’s war effort in recent history is littered with failure when she tried to do it alone. From Vietnam to Somalia; but when America joins forces with others; the result is spectacular!
Perpetrated myth of the “MIGHT” of some players in the market is actually to discourage competition; identify other players and collanovate.
Can you innovate on your own? collanovation is the future.
GlaxoSmithKline, and a small manufacturer, Oratech LLC, overcame partnering challenges to launch a successful new teeth whitener in a crowded market.
The runaway success of Google, Facebook and Yahoo is all about collanovation – when people come together, pooling resources, ideas, concept to form a new, single product.
The Manifesto
- You are limited by the Power of One
- Let Go of Ego
- Be Open & Honest
- Collaborative effort is achievement Oriented
- Recognise we; including our customers, are all winners
Collanovate; Don’t Compete!
Image via daveferguson
