Scouting for Growth
Every industrial revolution brings with it new ways of innovating.
For companies scouting and developing new technologies, the talents for leadership are markedly different than those in Silicon Valley. For one thing, the new leaders are 'polymaths', leaders with multiple skills, interests and experience.By Hannah Schroer
Polymaths Scout Growth Opportunities
Every corporation needs a generalist - a polymath - someone with a scope of knowledge who can see the future of business momentum. The trick is creating generalists in a corporate environment that has an inherent tendency to shrink away from uncertainty to protect core assets when the going gets rough, according to Chris Hartshorn, PhD, Chief Research Officer at Lux Research. Generalists have the expertise to come into corporate partnerships and help generate the big ideas — or assess the problems that need to be addressed before their companies can grow. Once partners have an idea, they can create a roadmap to help them realize their goals.
The need for generalists is heightened as corporations start scouting for growth instead of core technologies. This process can be tricky, as it involves long term planning. But when markets become commoditized, companies have to lower prices to remain competitive. While focused on decreasing profit margins, companies feel the pinch but are unable to innovate because they feel the need to be more effective, rather than searching potential revenues. Investing in growth opens up horizons on what to look for in an investment, and the breadth of possibilities can be overwhelming. As a result, companies are looking for sustained growth from innovation in smaller, more nimble startups.
“The one group that must grow or die are the startups. They can’t just hold onto core business because they have no core business,” according to Dr. Hartshorn.
Identifying these kinds of opportunities demands a multi-faceted executive who can see the intertwining technology, policy and financial landscape. The new models of innovation are centered on building complex networks from the ground up.
A polymath succeeds by looking at growth as an ecosystem with many sections: for example, energy efficiency, and within that, data management, energy reduction in the built environment, fuel economy and so forth. Within each section, scouts can identify what startups are succeeding and look at where they came from, and also examine where current R&D funding is going. This kind of information provides an overview that helps corporate executives make new investments.
Following through and making the partnership a success, lead by Dr. Hartshorn’s Polymath, corporations learn what the innovation climate is like in more entrepreneurial companies. This information helps develop strategies that support the smaller company’s unique innovative style within the larger network, while at the same time sustaining corporate growth.
A polymath (Greek: “having learned much”), sometimes referred to as a Renaissance person, is someone whose expertise spans a significant number of different subject areas. In less formal terms, a polymath (or polymathic person) may simply be someone who is very knowledgeable. Most ancient scientists were polymaths by today’s standards.
Why aren’t more companies investing in growth?
“There is a conflict in the corporate innovation environment right now that is driven by leadership that is causing a problem with scouting, and it’s causing a problem with the way we view innovation.”
Traditionally, when corporations look for an investment, they scout for a technology that fits an identified need within the company, finding an operational hole in order to invest in something that will fill it. Focused on improving its immediate needs instead of investing in innovation, corporations risk falling behind the competition. When companies turn away from growing markets to focus on maintaining current holdings, they miss an opportunity to be in the forefront of innovation.
The traditional approach to innovation is counter-intuitive in the clean and biotechnology sector, because new products have benefits that are vastly different in scope and scale. In many ways, it is like being in the 1990’s, when companies were just imagining what computers and the internet were going to mean to their business. Ignoring these new technologies – which many thought were tangential to their core business – left many companies behind. Because the world of growth scouting is more complex than the standard method, companies have a longer wait before they begin to see returns on their investments. Dr. Hartshorn concluded that it is easy to ignore innovation and focus on in-house technologies, but that is a fatal flaw in the competitive market.