The Research Workshop on Business Innovation and Learning Table Discussion on Managing Innovation in Growth Markets centred around understanding the concept of business innovation and its effect on New Product Development, Value-Chain Distribution, Customer Relationships, and Operations that drive organizations’ focused growth, profitability, stability, and resilience. The agenda has been to learn actionable insights from multi-sectoral and multi-disciplinary research, to help senior leaders from global organizations learn necessary management techniques, innovation frameworks and tools that will help increase returns on their organizational innovation investments. The programme aimed at helping organizational leaders leverage emerging technologies in facilitating synchronized and directed business innovation activities. The day marked the presence of eminent keynote speakers addressing various attributes (Marketing, Finance, Accounting Operations and Technology) of Business Innovation and managing Growth Markets, the attendees were Chief Innovation Officers, Heads of Innovation/Growth, Innovation Directors from large legacy enterprises, Global Capability Centres, Unicorns and growth-focused enterprises across sectors including Retail, FMCG, Healthcare/Pharmaceutical, Semiconductors and Mobility space namely Citi India, Tata Motors, ITC Ltd., Reckitt, Intel Corporation.
The framework of value creation and value appropriation, combined with the leverage of technology, has become a cornerstone of modern business strategy. This framework outlines how organizations generate and capture value, with technology playing a pivotal role. This interplay significantly impacts organizational growth and value creation. Value creation involves the process of generating benefits and advantages for customers, stakeholders, and society at large. By harnessing technology, organizations can innovate and optimize their operations, leading to improved products, services, and customer experiences. Through technological advancements such as automation, data analytics, artificial intelligence, and digital platforms, organizations can create value in the long run. The factors playing key roles in value creation are business model innovation, efficiency, personalization, accessibility, and insights.
Value appropriation refers to the organization's ability to capture a portion of the value it has created. This phase involves strategies for monetization, pricing, and establishing competitive advantage. Technology plays a significant role in value appropriation by providing tools and methods to secure a fair share of the value generated. The key aspects of value appropriation include data-driven pricing models, building platforms with user centricity, creating a digital ecosystem for user experience, and staying ahead of competitors. Integrating technology into the value creation and appropriation framework has transformative effects on organizational growth.
Value creation and value appropriation significantly influence the price-to-book ratio (P/B ratio) in an organization's financial statements, which in turn impacts its growth. The P/B ratio is a valuation metric that compares a company's market value to its book value, providing insights into how the market values its assets to their accounting value. Value creation and appropriation initiatives, particularly those driven by technological advancements, can enhance a company's asset base and overall financial performance. The company's intrinsic value grows by creating innovative products, optimizing operations, and expanding market reach, resulting in increased book value and a positive impact on the P/B ratio.
Organizations should emphasize on developing intangible assets, which enhance an organization's long-term value and competitiveness. Intangible assets include non-physical assets such as intellectual property, brand recognition, customer relationships, and strategic plan or strategic investment, that affect the company's valuation.
This presentation delved into the intricacies of "Financing and Valuing Growth," unravelling the relationship between growth, value creation, and financing strategies in the corporate context. It began by dissecting different growth dimensions like balance sheet, revenue, and earnings, setting the stage for understanding their impact on financial indicators.
Through a case study of Flipkart's 18% revenue growth, the discussion delved into whether revenue growth directly correlates with shareholder value. It further examined the complexity of value creation by analysing earnings growth and challenged the assumption that sudden profit surges inherently lead to shareholder value generation. The professor emphasized the significance of persistent and long-term growth in boosting earnings and value, cautioning against sacrificing long-term prospects for short-term gains, particularly in R&D-intensive sectors. The discussion navigated the debt-versus-equity debate, delineating the benefits and drawbacks of each approach. It highlighted the suitability of debt for mature firms with stable cash flows and offered insights into capital structure variations across industries.
In conclusion, the presentation underscored the symbiotic relationship between growth, financial strategies, and valuation techniques. It encapsulated enterprises' need to adapt financing approaches as they navigate various growth stages. Moreover, it underscored the significance of aligning with changing industry paradigms, where metrics like user engagement and market reach hold the key to contemporary value creation.
This presentation embarks on a comprehensive exploration of "Corporate Governance," encompassing its narrower and broader connotations. The initial slide introduces corporate governance in its restricted sense, emphasizing its role in orchestrating board processes to safeguard shareholder interests. However, the more comprehensive panorama of governance is unveiled, portraying organizations as coalitions of individuals, each driven by self-interest and defined by a shared behavioural framework.
The concept of Corporate Governance explored through a dual lens of narrow and broader perspectives, unveils an intricate framework for orchestrating organizational dynamics and safeguarding stakeholder interests. While the conventional understanding confines corporate governance to the board's duties in protecting shareholder interests, the broader outlook portrays organizations as coalitions of diverse parties driven by self-interest.
The essence of good governance lies in the harmonious coexistence of shared expectations and self-interests, translating to wealth creation, gratifying work environments, and overall enhancement of participants' lives. This perspective debunks the transient benefits of surprising behaviour, emphasizing the long-term detriment such deviations can cause.
Good governance involves an intricate balance between legal regulations, market forces, self-discipline, social norms, and information sharing. These components collectively contribute to a well-structured organizational environment, recognizing the potential failure of a single approach.
The presentation acknowledges the dynamic nature of organizations, where shifts in environment, markets, and self-interests necessitate constant vigilance and strategic adaptation. It refrains from offering a universal solution, instead advocating for continually aligning participants' self-interests with their roles.
In synthesis, corporate governance transcends a mere regulatory framework. It's an intricate amalgamation of shared norms, legal structures, and individual motives, working together to create sustainable value and enduring growth for organizations and their stakeholders. This multifaceted approach safeguards against ethical and governance lapses and cultivates an environment where the collective good converges with individual pursuits.
The "Digital-Enabled Operating Models" presentation provides a comprehensive framework for understanding the transformation of operational strategies through digital advancements.
The presentation begins by defining an operating model as the convergence of people, processes, and technology, collectively contributing to an organization's operational capabilities.
The evolution of the Operational Improvement journey has been presented in four stages.
1. Correcting Worst Problems: Addressing the most critical issues.
2. Adopting Best Practices: Incorporating industry-standard processes.
3. Linking Strategy and Operation: Aligning operational strategies with the broader organizational strategy.
4. Establishing Competitive Advantage: Enhancing strategic impact, implementing, supporting, and driving strategies for advantage.
The presentation underscores that operational capabilities define an organization's value proposition and the commitments made to its customers. An illustrative model of the ' Sand Cone Model of Capabilities' showcases the progression of capabilities, from foundational to distinctive, as organizations advance in their operational journey.
The pivotal role of digitalization in shaping operational models is highlighted, underscoring its transformative potential. The discussion delves into the focus of digital-enabled operating models. It asks whether firms primarily direct their efforts internally at processes, functions, and departments or whether they strategically align themselves with market dynamics, competitors, suppliers, and evolving environments. The digital efforts can be transversal (perpendicular to other functions) or collaborative (inclusive of different stakeholders)
The framework includes the four models, which explain the Digital-Enabled Operating Model:
Digital Curiosity Model: This model involves the application of digital technologies to specific functional areas to enhance operational metrics and efficiency. The positive and negative implications are explored in relation to other parts of the organization. This approach generates tension among internal stakeholders and may create subcultures and specialized employee knowledge bases.
Digital Transformation Model: The transformation model emphasizes the application of digital technologies to improve operating metrics, necessitating a technology strategy. This approach demands change management with internal stakeholders and ultimately leads to cultivating a new organizational culture. Such transformation may aid in venturing into new markets and introducing novel offerings.
Digital Disruption Model: This model leverages digital technologies to shape new business strategies innovatively. It is distinct for being a pioneering approach to gain competitiveness. By embracing the digital native advantage, organizations break new ground in markets and amaze customers. The model requires educating customers about the technology's usage, generating tension among competitors.
Slide 10: Digital Control Model: The final model focuses on enabling the application of digital technologies across organizational boundaries. This approach fosters partnerships with other players in the market, leading to market transformation and increased competitiveness. Unlike some other models, partnering stakeholders experience no tension in this context.
In conclusion, the presentation paints a holistic picture of how digital-enabled operating models progress through various stages of improvement, transformation, disruption, and control. It underlines the potential of digitalization to reshape organizations, their value propositions, and their market positioning.
The presentation on "Leveraging Digital Technology in the Innovation Ecosystem" delved into the dynamic intersection of innovation and digital technologies within the framework of collaborative ecosystems.
The discussion commenced by defining innovation as the realm of possibilities, emphasizing its paramount role in organizational progress. The increasing digitization of the world underscores the significance of adapting to the digital landscape. As innovation thrives within ecosystems, digital technologies emerge as pivotal tools for driving innovation, prompting organizations to embrace these transformations to remain competitive.
The key points highlight a comprehensive journey of fostering innovation through the strategic utilization of digital advancements:
These principles are drawn from research and practical insights, guiding innovators towards maximizing the potential of digital tools.
Grasping the essence of the innovation process is foundational for innovators aiming to integrate digital technologies effectively. The presentation underscores that not all digital innovations are equal and that comprehensive comprehension is essential for successful implementation.
Innovation's inclusivity emphasizes the role of both employees and customers. Self-service technologies (SSTs) revolutionize customer interactions and service processes, although unfamiliarity can lead to customer loss. Complementary investments in marketing and human capital support to overcome these challenges.
Empirical data indicates that innovative SSTs may inadvertently reduce customer growth. However, strategic marketing and human capital investments counteract these effects, enhancing awareness and trust.
His presentation distinguishes closed and open innovation models, revealing how digital technologies contribute differently. The role of IT Use for Closed Innovation Activities (ITC) and IT Use for Open Innovation Activities (ITO) is discussed in the context of SMEs, which often face technological and government support deficiencies.\
The presentation concludes by encapsulating the essence of the "Art of the Possible" – the strategic identification of digital technologies that drive ecosystem innovation. This proactive approach empowers organizations to instigate transformative change aligned with the principles elucidated throughout the presentation.
In summation, the presentation adeptly navigates the fusion of innovation, digital technology, and ecosystem dynamics. It emphasizes the importance of strategic awareness and proficient utilization of digital tools to foster innovation, ensuring organizations remain at the forefront of progress in the ever-evolving business landscape.
In conclusion, the interconnected concepts of value creation, value appropriation, financial strategies, corporate governance, digital-enabled operating models and leveraging digital technology underscored the intricate framework that defines modern business success. The synergy between technology and value creation drives sustainable growth, elevating an organization's financial standing. As businesses strive for change, they must weigh short-term gains against long-term value generation, navigating the delicate balance of debt and equity.