Written by – Ranuli at OmeBiz
Omentra held the second episode of their corporate talk series ‘58 Minutes with’ on the 27th of September 2018 at the CA Sri Lanka Auditorium. The esteemed guest speaker was Mr. Nathan Sivagananathan who spoke about how to Disrupt and Thrive through Innovation.
The Sponsors of the Event
- Airline Partner – Sri Lankan Airlines
- Banking Partner – Frimi
- Printing Partner – Anim8.lk
- Creative Partner – Omentra Digital Solutions
- Digital Media Partner- Omebiz
To get to know more about Nathan Sivaganathan:
Here are some highlights that happened during 58 Minutes with Nathan Sivagananathan:
MAS visits Silicon Valley
They visited some of the most leading tech giants such as Facebook, Google and 3M. Where they were able to immerse themselves in various environments especially in universities such as Berkeley and Stanford to understand the culture of learning from each other.
This changed the way they viewed how successful companies run innovation. MAS worked with Proctor and Gamble and came up with a strategy for generating growth. This strategy entailed that 50% of MAS’s growth would come from innovation.
Secondly, they were also able to understand the concept of Open Innovation and incorporated it into their operations. Open Innovation means that everything does not need to be developed by the company itself, rather innovation can come from other sources. However, MAS found out that it was rather different in the valley, employees exchange their ideas in a coffee shop and discuss which option is best to go forthwith. Mr. Nathan mentioned that Sri Lankans need to change their mindset and be more open to sharing ideas as it is not possible to improve their products if they are not willing to share ideas.
Furthermore, Mr. Nathan stated that Open Innovations involves creating an ecosystem outside your organization and finding a solution that’s already out there. For an example, when Steve Jobs wanted to introduce the first iPhone he went to the Science Company, Corning, for their glass requirements. They already had a product they launched in the 1960’s, the gorilla glass, which is currently being used in all iPhones today.
Similarly, MAS also has an Open Innovation hub on their website to understand the top needs of the business and their customer enabling them to gather solutions globally. Mr. Nathan specified that it is important that companies understand and define their problem and then go out and look for a solution.
Thirdly, MAS realized that understanding the customer is one of the most vital strategies that should be adopted in every company. MAS serves the B2B market, hence it is not about what their customer thinks but rather what their customer’s customer thinks. In the past 5 years, MAS has taken the time to understand the market space by figuring out the consumer market.
How Twinery was Born
Twinery is the newest concept of MAS, it is an organization that brings world-class scientists, designers, engineers and marketers together. They focus on commercializing the businesses and technologies of tomorrow in order to transform a business. This includes digitization, customization, automation, sustainability, wearable tech and many more.
In the last 4 years, they have developed 50 disruptive technologies in apparel and soft goods. They have also launched 5 adjacent business opportunities that have created new business and employment opportunities globally.
Mr. Nathan went on to give us some insight into the culture of Twinery. Twinery follows a flat organizational structure where every employee in the organization is considered to be an entrepreneur. There are no hierarchies and everyone works in teams. Collaboration is the key factor that drives operations at Twinery.
How to Structure Innovative Business Organisations
- Always incorporate a structure that is different from the mother company for the startup. This is crucial because if it is the same structure that is used legacy issues are likely to arise.
- It should be categorized as a startup as this would mean that it would be less bureaucratic. It is vital that employees are given more freedom in order for them to be more innovative.
- It is highly important to have in-depth knowledge about funding. Networking and branding can help break or make your business.
- Look at key matrices and have a clear pathway for innovation. MAS has an innovation pipeline which consists of scope, discover, evaluate, pre-launch and launch. Then they release resources of money and people based on the project and the potential delivery of the project.
- The organization needs to be consumer-centric when innovating, understand your customer in order to deliver what they want.
- The focus of the business should be the consumer mindset instead of technology
- Prototype first, gather feedback and proceed – Products are can be tested on Indigo and cloud source platforms. For an instance, MAS has dummy websites to understand who the consumers are, who is interested and demographics of the people visiting these sites.
- Open Innovation – first define the problem you are about to solve and then go out and look for it.
- It is important to understand the marketing, the consumer, the price that is needed to take the business to market. Not everything is not a B2B sale or B2C sale. Sometimes it’s a B2B2C sales or B2B2E sales, it depends on the business model and where you are trying to create revenue space determines how you develop the marketing strategy as well.
Who got it right and who didn’t?
- 3M had a KPI that 30% of all their products must come from innovation
- Procter and Gamble had a strategy that 50% of their revenue must come from open innovation
- Google runs an incubator called Area 120 where employees are given 20% of their time to think about what they really want to do
These companies are doing things differently, in order for them to be innovative and their employees to be innovative.
However, some companies had to stop their operations due to lack of innovation. For an instance, Blockbuster at its peak was the biggest rental company with over 9000 stores and 84000 employees in the US. In 2010, they went bankrupt. Nonetheless, they were offered to buy Netflix for USD50mn but they refused to say that Netflix is too small.
Similarly, Kodak invested billions of dollars in digital technology, they knew it was going to become disruptive. They had the opportunity to introduce digital cameras and phones, however, they didn’t do it because they thought it would disrupt their business.
CEO of Nokia said “we didn’t do anything wrong” however they lost their space in the marketplace. Thus, if you don’t understand the consumer in this innovative world and how they are moving, you will not understand how to serve the next generation of consumers/ entrepreneurs
Thus, the focus at Twinery is to disrupt their business and constantly think of what will disrupt them.
Why is innovation vital?
Technology has been taking large strides towards advancement over the past few years, almost every single person has a phone. We are living in an exciting time where everything is changing, the business revolution is coming through and industry 4.0 is changing the way we do business together. There has never been a better time than today to change and become a global market player.
In the past, large companies controlled the economy and the SME’s never had the chance, today it has changed, the internet and digital platforms have enabled them to win. It took 75 years for the telecom industry to get 50 million users whilst Facebook took only one year. If we look at how long Pokemon Go took to get 50 million users, it was just 19 days. If organizations don’t understand that there is going to be change they would fail. The technology is out there – blockchain, AI, e-commerce, 3D printing. Therefore it is essential that companies and startups use these technologies as a platform.
Innovation is vital to understand future trends, how things are changing and give a national perspective.
In Israel, the government gave the right policies and initial actions to incentivize tech innovation. They set up a powerful central innovation organization and invested at an early stage for technology. They gave the opportunity for entrepreneurs to create companies and take their tech outside of the country. Today, Chinese companies are heavily investing in Israel because of this. There are over 10000 international companies set up, 250 global companies and 80 fortune 500 companies have their R&D centres in Israel.
Singapore capitalized their position as the “Heart of Asia” with the fact they have the correct location for logistics and financial opportunities.
Jamaica started off with heavily relying on the coffee industry. Initially, their economy boomed, however, due to late and confused policies, this collapsed, and now tourism industry is keeping them alive
We have the opportunity to become one of these countries.
Sri Lanka has tea and apparel as a great export. Nevertheless, we have not invested in exports. Our currency fluctuation is due to the government not investing in export-oriented industries. As well as this since only a few families control the major companies in Sri Lanka, therefore it is crucial that we encourage more entrepreneurship by creating more opportunities for millennials.
How can Sri Lanka harness innovation and drive forth our economy?
Mr. Nathan Sivaganathan suggested that Sri Lanka needs to follow four steps in order to harness innovation:
- Move to an export-oriented economy
- Focus on becoming producer lead organizations, there’s no point selling loose tea and minerals instead we should brand and sell our products.
- Develop a tech lead industry – Sri Lanka has an abundance of millennials who are well educated on technology. We have engineers, scientists and experts in the country.
- Relax the immigration rules – If we fail to do so, we will continue to lack the right skill set. Sri Lanka has only 1 in 525 foreigners in the country.
The Talk Show was followed by a Q/A session and Raffle draw where one lucky individual won a return ticket to Singapore from Sri Lankan Airlines. Stay tuned for the next episode!