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How to Remain Relevant In a Disrupted World – Innovation Insights from Silicon Valley

Adrian Simpson, Wavelength’s Co-founder and Chief Connector, distils the pertinent themes from their recent immersion into Silicon Valley, sharing insights from some of the world’s most forward-thinking businesses including Airbnb, W.L. Gore Associates, GE and The Ritz-Carlton Hotel Company.

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Business leaders today face the most disruptive, challenging and fast-paced times ever. Opportunities to engage customers and create value are endless, but so too are questions on how to do this effectively – retaining relevance and loyalty – in a climate of mass disruption and ever-evolving consumer habits and expectations.

This summer we took a group of C-suite leaders from across the globe from blue chip companies including: Tesco (UK), Virgin Atlantic (UK), Emirates NBD (UAE), TD Bank (North America), Craveable Brands (Australia), and CavinKare (Asia) into the beating heart of Silicon Valley.

Our purpose? To be inspired, educated and provoked. To find solutions for our business challenges and take water-tight, evidence-based arguments back to the board room. To show and tell the ‘art’ of the possible.

Why? Summed up most succinctly by Gerald Brady, Managing Director, SVB Networks, Silicon Valley Bank“Trust me, Amazon is not worrying about you.” A comment which simply identifies the need for established corporations to innovate or face impending doom.

Here are the key insights and they are – of course – inextricably linked!

Deconstruct to innovate – combat ‘legacies of crap’

Innovation may be critical – but it can seem elusive. Entrenched companies with ‘legacies of crap’ are often not built to operate in this environment.

So, how as a global corporation do you create breakthrough innovation?

The Adizes Lifecycle (pictured below) outlines the widely established corporate lifecycle. The left-hand side of the diagram shows the stages a company goes through as it is focused on value creation. Ascending from launch the business is nimble, seizing opportunities and experimenting to drive it forward to the stage where it becomes stable. The right-hand side is all about value exploitation, scaling the offer and maximising it for best advantage, but suffering some of the side effects of being larger and established.

A key insight is that most (if not all) entrenched businesses are focused on exploiting their value, not creating it. To innovate they need to deconstruct the rules that apply to the right-hand side of the curve.

How can they do this?

W.L. Gore & Associates are a global materials science business behind Gore-Tex. Historically they do not understand technology. But they asked the question – what could tech start-ups in Silicon Valley do for us? How could we integrate new technology with our products and break new territories? So, they created a division based in Silicon Valley to partner with cool tech start-ups and create new customer solutions. Each sharing the IP and the resulting profits. The division was jointly headed up an existing company leader (Linda Elkins, enterprise innovation) and a new head of innovation with strong connections in Silicon Valley (Paul Campbell, Chief Innovation Officer). This carefully reconciled the need to balance the established ways with the new ways. It created consistency yet embraced change.

Similarly, San Francisco based GE Digital helps the 100-year-old industrial giant remain relevant by combining GE’s ability to make products with their ability to capture and leverage data.

Deconstructing the rules can also apply in the realm of pay and renumeration, GE recognised the requirement to invest, and remunerate Silicon Valley tech engineers and innovators with often larger packages which might fall outside of a traditional grading system.

Crucially both companies de-constructed their respective business life cycles by creating ‘start up’ divisions to drive innovation.

Another way to innovate is to partner with an organisation that is already fully immersed within the Silicon Valley ecosystem, knowing the culture, the VCs and having the experience to navigate the networks.  RocketSpace is a leading Silicon Valley based tech focused accelerator for seed funded businesses. It’s also affectionately known as the unicorn farm because at least five companies have emerged from its realm to hit the five-billion-dollar mark. For this reason, the CEO of Ferguson PLC who participated in the USA programme last year decided to partner with RocketSpace, appreciating their access to the Silicon Valley ecosystem.

Create a service ‘culture of excellence’

Airbnb’s physical environment is a glorious manifestation of its culture and values. Their environments creative director (Aron Taylor Harvey) runs a 10-person team responsible for all offices. Two-meter high portraits of hosts and their families adorn the walls, regaling tales of why he/she does it and why they love it. City-named meeting rooms reveal pictures of live-listing living rooms and incorporate physical reproductions of that very room.

Simply put, employees are living and breathing their customers.

Honesty prevails as a grey wall shares stories of misalignment and bad experiences. Walk further down to see stories of getting it fantastically right!

Every employee fully understands who they serve.

The Ritz-Carlton Hotel Company have instilled employees with an extraordinary level of engagement through a feature called ‘line up’ where every hotel and corporate office globally receives 15 minutes of live cascaded information daily. It might contain news of a new hotel opening in Dubai or an inside track on guests staying within that hotel. It empowers employees through knowledge they can use for, and share with, their customers.

The company shared a heart-warming story of ‘Joshi the giraffe’ a beloved soft toy left by a young boy staying at The Ritz-Carlton in Florida. A panicked father told his distraught son Joshi was extending his holiday. The hotel located the errant giraffe and the loss prevention team went the extra mile by sending him home, complete with a full photo album of his adventures and selection of branded goodies (frisbee, football etc). The boy and his family were delighted and went on to tell the tale.

It’s this kind of service that raises the bar. The Huffington Post unsurprisingly reported that many senior executives cite their desire to be ‘the Ritz-Carlton of customer service’.

Win the war on talent

Create a truly fantastic place to work. Knowledge empowers and engenders respect from your workforce, as does providing a great physical environment to work in (such as those we visited) with creative stimulus and freedom to play.

The Ritz-Carlton’s director of engineering allowed his team to create a ‘heart of house’ (back office!) which fires and fuels the business. Here they have built their own golden gate bridge and lounge-style breakout areas, with inspiring philosophical quotes on the walls. It’s a place they can imagine and then own.

Their message? We can inspire you, not just merely train you.

The result? In a sector notorious for low wages, training and menial jobs The Ritz-Carlton have broken the mold. They have highly engaged employees delivering consistently high levels of service which means higher profits. It’s a hugely admirable business model.

We are the sum of our experiences

Now, more than ever, consumers crave experiences not things and the ‘experience economy’ is set to thrive.

Airbnb has launched a platform that creates curated experiences by category, such as art, music, beer, hiking etc. They are also disrupting the corporate travel and meetings market by launching Airbnb For Work – providing unique alternative meeting spaces.

If making memories is a key driver for today’s travellers, then the company is perfectly positioned to capitalise on this. What’s more there is potential to move down the value chain, using their data to offer a completely integrated travel experience through alignment with airlines and train companies.

The Ritz-Carlton’s parent company Marriott recognised this trend and launched Moxy Hotels, a chain of affordable, boutique hotels designed with a millennial audience in mind. Those with ‘an appetite for adventure’ get a drink with their room key and can play games such as Jenga and spin the bottle. There are selfie cameras in the lift and bar is open 24 hours. The launch party in Berlin was S&M themed and the hotel offers a tongue in cheek take on the hedonistic party lifestyle favoured by young travellers seeking fun and thrills.

Marriott recognised the need to push new directions and it is a great example of how to remain relevant.

So….to sum up

Whether it’s how to engage the hearts and minds of employees, bring customers to life or create breakthrough new products and business models – innovation runs through the heart of these organisations and is vital in the quest to stay relevant.


Wavelength USA 2019

Between 16-21 June 2019, join us as we visit Airbnb, The Ritz-Carlton Hotel Company, GE, WL Gore & Associates, Silicon Valley Bank, Rocket Space – the valley’s leading tech campus where Uber and Spotify began – meet thought leaders on AI, Machine Learning, IOT, Big Data, Security and Future of Work. Click here for more information or please contact Adrian.

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