Innovation: Vital Force of Civilization
The “AAV Innovation Center” as a new member of the dnaunion family, while emphasizing on innovation, is trying to create and use the future-generation marketing services with the help of “technology-oriented” and innovative people. The opening ceremony of the AAV Innovation Center was held with the participation of influential people and managers of different industries. At the ceremony, Gerhard Barcus, the Managing Director of Certius Company, delivered a speech on the importance of innovation, details of which follow.
Director General of Certius Company Gerhard Barcus said at the ceremony: “Civilization is dependent on innovation and innovation is the vital force for civilization. This is a big claim that cannot be denied. When we look at the history of the eleven thousand years of human civilization and examine the smallest processes of scientific development, we see a very low speed in the major innovations in the human history; innovations such as the agricultural revolution, plowing of the cities, writing and mathematics. This trend has been very slow in the past and innovation has initially taken a slow trend to such an extent that every person during his lifetime would not have experienced any change through innovation. At that time, everything would remain the same as before. The speed of innovation was so slow that the human population would grow at the same pace.
This process continued until the Industrial Revolution caused rapid growth of the population: A revolution that was the harbinger of innovation. In other words, innovation has affected the growth of the population. At that time, we witnessed the direct connection between the population and innovation. The remarkable increase in significant innovations in a short period of time (about 90 to 100 years) led to the population growth in such a way that the number of human population today exceeds the border of 7 billion people. In fact, innovation has given rise to population growth by providing the resources needed for life and prosperity. Population growth will both put pressure on innovation and, in its turn, will bring about the state of comfort and ease of life. Innovation also helps keeping people alive in the future and flourish. In continuation, it will be described why innovation is the vital force of civilization and why paying attention to innovation is necessary for companies.”
Factors Differentiating Businesses
Barcus added: “To describe why innovation is important for companies, it is better to concentrate on this important topic and examine it more closely. When we talk and work in our companies as well as in our businesses we have some unpleasant feelings. We are fine when our competitors are fine. If we try to be a bit better, they are trying to be better. We have similar analyses, strategies and results. So when we enter into a store or a bank, what is the real difference? That is to say, except for the people in the business, the marketers and the directors what else makes a difference for the customer? Usually there is no distinctive factor, which means that the customer (male or female) decides on the basis of price. This is exactly what the businesses do not want and causes repetition of competition in the market.
What the businesses want is the creation of specific features and a clear vision for the future, i.e. dominating over the industry contracts. Our challenge is the way people think about how businesses should be and someone should be mindful of them. Then, we turn in into strategy, and deal with the operational systems of skills and capital that separate us from each other, in a distinctive way that related to the life of the people which is usually done through innovation. Now all the market players know the entire life cycle of the industry. But it is better to review a different perspective of this lifecycle.
In this respect, I refer to three separate phases: for example, when a new business is launched like an Internet transit service or Snap, the first phase is to ask yourself: what game have I entered to? How can I succeed? How can I make money from this business and who will earn a living from this business? I call this first phase the struggle for thoughtful leadership. Those who understand better and understands this business better are in a good position for making decisions that will flourish in the future. The second phase begins when we tell ourselves: I have noticed what will happen and now I want to have a fleet of drivers and get customers.
In fact, my question is how I can collect the skills and capital that I need for success. We call this phase creation of migration path to the future. Now we do all this. All will get mature. The industry will be matured. Everything is different, and here is the moment we stop innovation. We stop the immigration route and what we really do is to compete for gaining market share. Now the key question is how we can grow our market share in a sustainable way. For many of us, the 2% growth of the market share is a great success and we are encouraged to do that and it is reasonable to be compared with the first phase. The interesting point is that in the first two phases, almost all the organizational values are created. But it is interesting to know that here is the place where most of us will spend most of our lives. The reason why it is interesting is that the most unfavorable phase is the one that records and captures all of our time. What should we do with this? But before I say what we can do, let us see what happens in each phase. At the beginning of the process you define the rules and try to create your own superiority over your rival, you want to overcome and this will happen in the beginning. This phase will become smaller and smaller over the years while the other phase that performs the business and is operational within the limits of rules and frameworks that have been defined so that we make efforts to achieve small successes, will become bigger. If we have achieved excellence, we will use it. So market opportunities have become stable and the proven rules for competition are more transparent. The interesting point that exists is the chain of innovation that forces us to return to our past and our past method. We can return from phase three to the first phase. When we start to redefine the values and the chain of our values and re-create and re-configure and eventually stop the current process, we can root out the competitors.”
Three Important Elements in Innovation
Barcus further remarked: “These days, news have been spread about a major strike of the Spanish taxi drivers in Madrid, in a small part of the country. Now almost nobody can go and travel in this area; this is the same event that we were talking about. This local event has severely threatened the stable business model of taxi drivers in that area and made them unemployed. Therefore, the interesting point is that with innovation we can go back, to the same fascinating phase we want to be. I want to give you a practical example that everyone knows about and is a good example. In the first phase of mobile phones, some of you may remember Motorola, while many others may not remember it, because it does not exist anymore. In those days, cell phones were critically important for managers. Cell phones were functional as computers. The key skills needed for the success of the companies were summarized in the control of the new technologies and access to organizational customers because organizational customers were of the gender of the directors. But Nokia had a completely different insight and totally rejected this view. Based on this insight, mobile phones were a lifestyle, and featured a new lifestyle for all the people. Suddenly, cell phones became smaller and more colorful and the customers could change the fonts and the colors. Prices became cheaper, and Nokia’s key asset was the fashion on hourly basis as it was basically cheap and efficient and was mass-produced.
And the third phase, of course, you know and there is no need to say that Nokia bought Motorola business. In the third phase, Apple as a dominant company had a different behavior. Mobiles were constantly connected, and the performance of mobile phones is defined with the same constant connection and what the company should know here is the supremacy in the development of the technology UX design. What we should know is that Apple completely eliminated Nokia mobile phones - something that we call creative destruction or revolution. I think this event is in fact a destructive innovation that we all have witnessed. And regrettably, we were not able to experience Motorola’s era.
For the innovation to take place we should consider three elements; the first element is the customer’s insight. The second is the empowering technology; the core technologies that allow transfer of the advantage, even in a new and different way. And the third element is what we call social- economic empowering. So, we should look at the great changes of the frameworks which, in their turn, are very dependent on each other and have a great deal of impact on one another.
Let me give you an example; in fact, I’ll take another example to make the case clearer. Photographs; in the old days, photography was done with the film, and this was the central technology in which there were optical lenses and the technology to develop the negative. People would go on trip and take pictures, and after the photos were developed would send them for each other. Therefore, the photographs were a tool for the documentation of the memorable moments of the lives of people and the places. What came after was the home computers that due to the specification of the economic-social empowering element was present everywhere. All had computers and everyone was looking for digital photography, and the digital photography technology allowed them to do this. In order to encourage customers to use this technology, attention had to be paid to this need that they wanted to take a lot of photos and to see them immediately and they did not want to take the film to be developed and see the photos a week later. So we know that this digital technology has removed the film in the photo industry. The next story is that what we have created as the society has an instantaneous cultural momentum. Everything has happened at the moment, that is, we do not need to wait for something. Everything is, in fact, the authority-giving technology which is part of the smartphone technology forces whose function is to encourage people to say they can take photos every moment and everywhere they wish to. When you go back to the past, you will see that prior to the equipment of the mobile phones with lens and prior to the ability of mobile phones to take photo, the incident that was expected to happen was not clear that much. Now this is a clear issue, but nothing was known those days until decision was made. So there was need to have a good understanding of this issue and also of the authority-giving technology without which no phones and integrated cameras would be created. Of the recent phases, which are in fact all social, the empowering technology of 3D and the social networks could be named, the latter being very epidemic which, in an all-encompassing form, has been turned into an alternative for physical encounters. Therefore, when we talk about innovation, we have to look at all the three elements, and only these three elements. Now I should say how much the dnaunion can help the businesses.
Key to Business Success Is Full Understanding of Customer Needs
Certius Managing director said: “The key factor for business success is the full understanding of the customer need, based on which the strategy can be determined and a good product can be designed according to the needs of the customer. This way, they will have a kind of customer interaction in this process. The greatest help dnaunion can render to the businesses is to look for these insights in making decision on products, understanding classifications and having relations with the customers. But among the constructive examples that exist, I can name the Body Shop, which in the 90s provided a whole new concept in the field of cosmetics.
Body Shop found out that there is a subset of its customers who want something more than beauty and cosmetic products. They were after decent services. Therefore, the first idea that came to Body Shop’s mind was not to test cosmetics on animals, and they also used this approach in other areas of environmental sustainability. The progressive key here was a new definition of value, in fact, the value that finds meaning for a new target group. Therefore, what you need for an innovation strategy is a good understanding of the emerging customer values. It does not need to be proven that at that time it was necessary for the mind to be very progressive and have a leading thinking about the business model. You re-define and configure cases that existed before.
The AAV Innovation Center can help them here - by helping with a progressive approach and looking to the future – in line with future customer values as well as in the process of product design strategy. Also, help them to communicate with the customers in their own language, because they are often subsets that are rarely spoken to. The last point is about innovation on the business model. This is the most exciting part that we are going to talk about. We will talk about people who have introduced the destructive and revolutionary models.
To achieve a revolutionary model in business, you need to be equipped with a force beyond the existing trends. You should overcome the stiff and stable ideas. These ideas are exactly the same thing that all think the businesses should be based on. I think it is worth remembering that Amazon began to work as an online bookstore and had only books: A work full of constant and stiff rules in the field of books and publication. When we want to buy a book we want to see it and see its content and quickly buy it. Therefore, the Amazon showed false rules. It was in this way that it established its great empire and today is one of the most cherished companies throughout the world. In this way, the business overcomes the industry, re-configures value chains, and most of the time has cheaper and often better produces, such as Uber vs. ordinary taxis or Airbnb versus conventional systems. We are talking about technology-based products that have been shaped on basis of analysis based on education and understanding the stiff regulations of consultancy, new business models, and new values and customer interaction.
In conclusion, we hope that businesses take significant and bold decisions because to be bold will change everything. You can watch the moon from the height of this garden, but the astronaut in space has a bigger image of the moon.