Last month, we were in Malaysia to run two very rewarding sessions of Business Innovation Bootcamp.
Throughout the week, we worked with large and small businesses across several different industries, from utilities, finance, oil and gas, to car manufacturing and logistics. Their one biggest question?
“We know we need to innovate. But how?”
The country has done well to weather the economic storms of recent years. From 2010 to 2015, the Malaysian economy has grown at a rate of 5.6%, with the economy forecasted to expand by more than 4.8% by end of 2017.
However, with two out of three of the country’s exports stemming from unsustainable sources like palm oil and fossil fuels, Malaysia is beginning to face growing sustainability challenges.
As the world moves towards a greener economy, there is now a stronger need to explore new growth areas that are sustainable, inclusive, and fit for future generations of Malaysians.
This vision is backed by the government’s ambitious Transformasi Nasional 2050 (TN50) initiative, a program that aspires to transform the Malaysia of today into one of the world leaders in economic development, citizen well-being, and innovation by the year 2050.
Many long-established Malaysian companies are aligned on this goal, as they are slowly beginning to feel the cost of remaining stagnant. And while they face a growing need for transformation, many of them are stumped as to how they can re-position their businesses that has for decades remained their sole focus.
The biggest struggles brought up during the Business Innovation Bootcamp in Malaysia were not very much unlike the usual challenges seen among our corporate clients in other parts of the world. These could be broadly categorized into hard and soft challenges that include:
People, mindset, and culture
Teams lamented the lack of a innovative culture within the company, where they worked in an environment that simply wasn’t conducive to large, innovative projects. They were bogged down with their day-to-day work, and was not incentivized in any way to think beyond today’s core business.
Lack of Resources & Support
Another problem was the lack of resources funneled towards business model innovation initiatives. Good, or disruptive ideas get killed, and teams simply do not get the kind of funding, capabilities, or support they need in order to take an idea to market.
Lack of the Know-How
Steering your existing core business while rapidly exploring new business models in parallel is a scary, and often risky process. Corporations need to know how to remove the risk associated with innovation, while still devoting time and energy to untested waters in order to fuel growth from innovation.
While these challenges do add significant complexity to business model innovation, it doesn’t mean that it can’t be done, or that companies shouldn’t spend time on it.
Getting Started on Your Transformation Journey
Our friends at Innosight recommend the dual transformation path. We call it building your innovation strategy based on Core, Growth and Explore.
First, decide on how much you should focus on your existing Core business. Next, define and decide your next Growth areas. But very importantly, decide on your Explore efforts, where you will be exploring entirely new growth areas and business models.
Based on your choice between Core, Growth, and Explore, every company’s innovation engine will look very different depending on ambitions on simply maintaining the core business as is, or exploring entirely new areas.
It might sound overly simplistic, but any innovation effort has to start with the basic understanding of the three areas — Core, Growth, and Explore.