A Focus on Innovation in the UAE.
Countries like the United Arab
Emirates are quickly transforming from oil-based to knowledge-based economies.
The numbers leave little room for doubt; knowledge-based industries and
services have grown in economies like the UAE’s from 32.1% in 2001 to
approximately 37.5% in 2012.
These transitioning economies make
it all the more important for companies to look at disruptive innovation.
Countries like the UAE have established themselves as key players in various
sectors including real estate, tourism and aviation, prompting businesses to
adapt, as innovative thought and practices are increasingly being implemented in
theory that was first coined by Harvard professor Clayton Christensen,
disruptive innovation explains the phenomenon by which an innovation transforms
an existing market or sector. This occurrence typically happens when the
introduction of simplicity, convenience, accessibility or even affordability
challenges a market where complexity and high costs are the status quo.
Disruptive innovation commonly takes place in niche markets that initially
appear as unattractive or inconsequential to industry incumbents but are gradually
redefined as a result of the new product or idea.
is not uncommon for companies that place little value on innovation to get left
behind. An all too familiar example is Nokia, a company that once dominated the
cellphone industry and now lags behind, as companies like Apple and Samsung reshape
the industry by disruptively innovating and outperforming competitors.
Managing for disruptive
innovation involves the following steps:
your Company’s Key Markets
a consensus with senior leaders on your firm’s priority markets. Whether
abundant with opportunities or plagued with risks, priority markets need to be
initially established and then segmented.
2. Decide which
market segments are of utmost importance
the segments are identified they may need to be redefined based on the
segmentation criteria that is established.
3. Analyze industry
the most important segments are defined, it important to analyze each one in
detail, using frameworks such as Porter’s 5 forces that analyzes the segment,
its clients, suppliers, potential entrants and substitution products.
what makes each player powerful
is also important to carefully analyze each of the players in the industry.
When looking at suppliers for example, the concentration of suppliers in the
industry as well as the switching costs and differentiation should all be
considered. The same strategy has to be applied to each constituent of the
streams also need to be identified. It is important to estimate how value is
transferred from one player to another, and address the question of who is
paying whom for what and how much. Public data can often reveal the intricate
relations between different players and can reveal who is capturing the larger
share of industry value.
5. Hypothesize on
ways to disrupt the status quo
step aims to establish methods or ways to understand how a dominant player’s
claim to an industry’s value can be decreased or increased. Whether it is through
suppliers, clients, substitution products or potential new entrants, it is
crucial to understand how each player’s relative power can be influenced.
team members need to thoroughly understand the industry structure. Once they
understand how value is created in the industry, it creates a framework for
more focused team work. Ideas for disrupting the industry in favorable ways
should be gathered as well as ideas for new products, solutions, services or
even clients. As the ideas are funneled, the most important ones can be
selected to form the basis for innovation projects that can be eventually
launched into action.
How MENTOR can help
We help organizations to introduce innovative thought and practices through specialized innovation programs and enable them to leverage the benefits of open innovation and idea crowd-sourcing through online idea management solutions.