Establishing Purple Cow (Innovation) in your Company's Global Strategy.   Print this page

by Nava Shalev

In the globalization age, most strategies no longer provide companies with a competitive advantage. Startups are able to compete with big corporations by establishing innovation. There are three kinds of innovation: product innovation, process innovation and strategy innovation. Although each kind of innovation can provide the company with competitive advantages I would like to focus on strategy innovation. R. Tucker (2002) in his book Driving Growth through Innovation defined global strategy innovation as: "Challenging existing industry methods of creating customer value in order to meet newly emerging customer needs, add additional value, and create new markets and new customer groups. The core of global strategy is creating new customer value."

Global strategy innovation can be achieved in these areas:

  a. Building new markets for the products / services (E-bay).   b. Creating added value for the customer.   c. Inventing new business models.   d. Establishing new distribution methods (Dell).

How can startups which don't have enough resources compete with international companies? The main capital of startups is their global human resources capital .These resources can enhance innovation and the ability to create value for cross cultural clients around the world. Both strategies enhance startups' abilities to become profitable sooner.

Gray H (2002) wrote in his book The Revolution: "It's not a way of positioning against competitors, but of going around them. It's based on avoidance, not attack. Here's the key thought: What is not different is not strategic" .It has to be a radical innovation that changes the customer expectation and change the basis of competition. Incremental innovation is better than nothing but clearly not enough. Startups have fewer resources to invest in the innovation process, but they have a great advantage because they consist of a small group of professionals."

Innovation thrives in chaos. There are two theories regarding chaos: One, which claims that you can't manage innovation due to the fact that unorganized processes can lead to it. A more popular view is of Peter Drucker who claims that you can build organized processes and manage innovation. Research studies in the U.S. and European computer industry have suggested that combining both approaches can demonstrate a company's competitive advantage. Companies such as Intel, 3M, and Disney found ways to organize what is a chaotic process in nature.

Startups have in the initial stages chaotic patterns which foster innovation. However, when they become global startups they have the challenge of creating organized patterns which foster productivity. It's a huge challenge because these processes are opposite in nature.

There are five strategies for enhancing innovation:
  a. The CEO and senior managers must be committed to the goal of building a company's innovation. John Pepper from Procter and Gamble took this goal very seriously and trained 6000 engineers to think in more innovative ways.   b. Hiring cross cultural staff with divergent business experience will foster innovation by their opposed views and disagreements. Also, diverse staff enhances a company's ability to create new value and to respond to cross cultural clients' needs.   c. Hiring "purple cow" professionals.   d. Establishing an "innovation management system" which evaluates new ideas while implementing the commercialized ones which adds value for the clients and produces wealth.   e. Providing innovation training to managers and professionals.

These strategies will enhance the process of building a company's innovation. However, the main challenge remaining is a psychological one:
How can CEOs and senior global managers move from their comfort zones and begin to challenge their tendency of falling in love with their products, services and strategies?

Nava Shalev is an entrepreneur, consultant, writer, and the founder of Global Relocation (www.globalrelocation.ca) with 16 years of experience in the high technology and biotech industries in the U.S., Canada, and Israel. Global Relocation provides global HR consulting to high technology & global startups and also provides career coaching for professionals from the high technology, pharmaceutical and finance industries who would like to achieve their career goals in the Canadian / American job markets. You can visit the Global Relocation Portal at: http://www.globalrelocation.ca/blog/ and also visit her blog (in Hebrew) at: http://Nshalev.gblogs.co.il. You can contact her at nshalev@globalrelocation.ca