How Big Companies Can Innovate in the Internet of Things (IoT)
According to an Accenture study of 1,000 large enterprises, big companies struggle with innovation.
The biggest barrier is not a lack of vision but because, by definition, big companies are mature. Organizational structures and processes are in place to guide the company towards efficiency. Seasoned managers steer their employees from pursuing the art of discovery and towards engaging in the science of delivery. Employees are taught to seek efficiencies, leverage existing assets, and listen to their best customers. Such practices and policies ensure that executives can consistently deliver positive earnings to Wall Street, but they also minimize the types and scale of innovation that can be pursued successfully within an organization. No company ever created transformational growth by doing what they do a tiny bit better and a tiny bit cheaper.
According to the Harvard Business Review, big companies can innovate by embracing the following best practices:
1. Create autonomous business units.
Most big companies fail to successfully build new businesses or products within their existing structure. In his bestseller, The Innovator’s Dilemma, Clayton Christensen points out that for disruptive innovations to be pursued effectively, they require autonomous business units. What’s more, his solution applies not just in the case of disruptive product innovation, but also to the business model innovations that companies repeatedly fail to embrace. The constant need to drive towards operational efficiency can be avoided through the creation of new organizations.
2. Incentivize for long-term viability.
The most common assumption behind corporate innovation is that companies have assets that can be unleashed to create value. However, in the process of unleashing that potential, leaders must make sure new initiatives are built with sustainability in mind. Giving away too much free access to the sales force, manufacturing capacity, marketing budget, and support can backfire when it’s time to scale and the underlying cost structure is far from being free. Leaders must manage internal transfer pricing to ensure the development of viable business models.
3. Develop and verify quickly.
In recent years, the lean startup movement has gained traction in the entrepreneurial community. The lean startup approach suggests systematically testing your business model against the assumptions you are making. If you can move from uncertainty to certainty using the fewest dollars and in the shortest period of time, your chance of success substantially rise. Big companies must encourage staff to test early and test often. Incrementally, they can turn a hypothesis into proven results. As ideas gain supporting evidence, the team can justify requesting additional funds.
4. Exercise leadership beyond numbers.
Alfred Sloan, the late CEO of General Motors, was known for his focus on maximizing return on investment (ROI). Despite his love of ROI, Sloan periodically invested in innovative efforts that couldn’t possibly be justified by the numbers alone. Sloan created an R&D unit to develop platform technologies for GM, protected the decentralized operations of his brands, and invested heavily during World War II with the hypothesis that capacity needs would pick up. When strict adherence to ROI didn’t make sense, Sloan relied on business acumen. Creating financial guidelines is helpful but intuition based on experience will always play a role in management. Vision can be invaluable in forecasting where profits will flow if the world changes. So when common sense and the numbers don’t line up, exercise good judgement that takes a holistic view.
Is Your Company Ready to Innovate in the Internet of Things?
The World Economic Forum predicts that the Internet of Things (IoT) will usher in the Fourth Industrial Revolution. BI Intelligence forecasts 34 billion devices will be connected to the internet by 2020 (up from 10 billion in 2015), of which IoT devices will account for 24 billion. In economic terms, nearly $6 trillion will be spent on IoT solutions over the next five years. Businesses will be the top adopters of IoT solutions for a number of reasons: 1) lowering operating costs, 2) increasing productivity, and 3) expanding to new markets or developing new product offerings. Governments will be the second largest adopters of IoT ecosystems.
Pursuing innovation inside a big company is tough. Effective leaders understand the importance of partnering with experts, and with the potential opportunities offered by IoT, there is little reason to go alone.
Amyx+, an award-winning Internet of Things strategy & innovation lab, is helping companies realize the full potential of the Internet of Things. We partner with you as your innovation lab to bring your IoT ideas to life. Our deep IoT domain and technical expertise ensure that the right products and services are brought to market quickly in a cost-effective manner. We help address the inherent risks with internal big company innovation by:
- Serving as your independent, autonomous innovation lab
- Shortening your development cycles and time-to-market
- Providing foremost IoT domain expertise and advanced technologies
- Developing, testing, and proving out your IoT ideas
- Continually optimizing your IoT products and services after launch
Achieve IoT Success
We understand the challenge of transforming an organization to embrace the Internet of Things. Let us help you increase your probability of success.
Contact Amyx+ for a free initial consultation.
About Amyx+ IoT Business Transformation | Strategy | Innovation | Product | Data Analytics
- Voted Top IoT Influencer by Skyhook
- Voted Top IoT Rockstar by HP Enterprise
- Voted Top IoT Influencer by Inc. Magazine
- Voted Top in the Business of IoT by Relayr
- Voted Top Global IoT Expert by Postscapes
- Voted Top IoT Authority by the Internet of Things Institute
- Featured as a Top Internet of Things Company by Postscapes
- Voted Most Influential in Smart Cities and IIoT by Right Relevance
- Winner of the Cloud & DevOps World Award for Most Innovative Vendor
Amyx+ is an award-winning IoT business transformation firm specializing in IoT strategy, innovation & product development. As a thought leader in the Internet of Things, Amyx+ has the creative horsepower and the development prowess to execute even the most complex client engagements. Amyx+ is working with international and multinational enterprises to help 1) understand the impact of IoT disruptions, 2) formulate and sharpen their IoT strategy, 3) quantify the business case, 4) experiment, learn, validate, 5) develop game changing technologies, and 6) launch innovative IoT products and services worldwide. We employ a flexible methodology and approach to fit the client and needs & objectives while adapting to changing IoT environments. We have presence in San Francisco, NYC, and throughout Europe.