Archetype Solutions Group grows extraordinary businesses by operationalizing innovation. Our advisory arm specifically contributes to this by distilling the arenas within our partners’ organizations that will help them create sustainable growth. Before getting into the details of how Archetype Solutions Group brings innovation to the middle market though, it is helpful to understand the “why.” Outlined is a list of several reasons for creating an innovation hub within an established company.
Reasons to Implement an Innovation Hub
- Fast-track the development of new products
- Identify inefficiencies within your business
- Explore the implementation of new processes
- Foster increased communication between different departments
- Facilitate gradual change without causing unnecessary disruption
Business as Usual
Companies put an inordinate amount of time, money, and effort into the development of elaborate plans for new products, marketing campaigns, and the like. However, traditional approaches towards business strategy are rapidly losing relevance.
Due to the constantly changing modern economy, lengthy approaches to product development and organizational change lead to missed opportunities.
Attempting to formulate fool-proof plans or refining every detail of a new product before its launch are viable strategies for some but prove to be inefficient for most.
The ultimate success of any business is determined by its ability to meet the demands of its customers. Though test trials, focus groups, and similar practices are useful they are no substitute for the marketplace. These methods offer insight on customer demand and potential areas of weakness in a new product or service, but they can also lead to conclusions that diverge from reality.
Ensuring a product is perfect before it is sent to market sounds logical for quality assurance and brand reputation. However, it results in a lack of ability to address the actual buying patterns of consumers once it goes to market. This lengthy process also wastes the most precious resource of all, time.
The Optimal Strategy of Adaptation
Situated between highly volatile startups and massive multinational corporations, middle market firms would be served well by implementing an adaptive strategy focused on continual refinement of their products and services. Yet, many of these firms lack the internal infrastructure to pursue this strategy.
Long standing companies have any number of established processes and reporting structures. While they allow the organization to function on a day to day basis, they can also be a source of inefficiency. Alternatively, abrupt change will likely do more harm than good by forcing an entire organization to relearn its way of doing things. Such a course would incite fear among the ranks and result in an unnecessary level of uncertainty.
Instead, a middle path ought to be pursued between rapid monumental change and adherence to established practices. One manner of doing so is accomplished through the implementation of an innovation hub.
Facilitating Change Through an Innovation Hub
The innovation hub is centered around the concept of an agile approach to business that focuses on the underlying drivers of success and emphasizes the necessity of real feedback.
The process is one of continual refinement in which a product or service is brought to market quickly and efficiently. Feedback from actual customers is continually aggregated, analyzed, and utilized to drive development of improvements to the original version of the product or service. This simple, yet effective method equips businesses with the ability to better address the underlying demand of their customers. Adhering to a nimble approach to product development involves taking the first step as soon as feasibly possible, getting feedback, and making continual improvements.
Creation of an innovation hub is conducted by assembling a group of carefully selected employees from specific departments (R&D, finance, marketing, etc.) to create a small, independent team within a company. The size and autonomy of an innovation hub grants the team freedom of extended maneuver in which they can bypass restrictive processes and procedures, quickly change their approach, and test out new hypotheses without hindering the performance of the rest of the company. By accelerating the process of development and enhancing a company’s ability to pivot towards a new approach, the use of an innovation hub goes hand in hand with the strategy of nimble product development.
Characteristics of an Innovation Hub
- Independent team: typically reports directly to senior management
- Represents a cross-section of the company (R&D, Sales/Marketing, Finance, etc.)
- Small footprint: doesn’t interfere with operations of the rest of the company
- Agility: ability to experiment with new products and procedures composed of carefully selected individuals
Innovation Hub in Action
One example of an effective use of an innovation hub is illustrated by one of ASG’s client engagements. The client created an innovation hub to improve the efficiency of its processes and identify new opportunities for growth. Archetype Solutions Group established and co-staffed this internal innovation hub to achieve the desired end goal. The company improved its data collection processes and expedited the development of a new assessment. What typically took 3-5 years to complete was accomplished in roughly one year, saving time and resources. By introducing an innovation hub into their organizational structure, the client improved its operational efficiency, increased internal communication, and capitalized on growth opportunities.
Considering a New Business Strategy
Nimble product development allows companies to better uncover customer demand as well as anticipate and react to the rapidly changing pace of today’s economy. The innovation hub introduces a unique way to accomplish this approach by carving out an autonomous team within a company’s existing organizational structure.
Through its small footprint and independent nature, the innovation hub brings agility to product development and organizational change. The implementation of an innovation hub also fosters increased communication between various departments of a company, identifies redundancies and synergistic opportunities not otherwise apparent, and fast-tracks organizational change without disrupting the overall company.