Innovation in a competitive environment

Innovation is the most potent weapon to counter any kind of competition. The same is true for individuals as well as organizations. In a competitive environment we find two different sets of people – reactive and proactive. Let us see what kind of results we get when we map them against – High Risk taking ability and Low Risk taking ability. Risk appetite is closely related to innovation. Let me clarify that risk taking ability does not mean financial soundness; it is just the state of mind I am referring to. Now, consider the following in a competitive environment:

Quadrant A:

Individuals or organizations in quadrant A look for opportunities which have a successful track record. These people are not very innovative but pick up successful innovations pretty fast and often race to success due to their higher risk appetite. When the first Bigbazaar (shopping mall) opened in India, people doubted its viability but its huge success prompted a lot of other entrepreneurs to jump into the retail bandwagon. Now Retail is a huge industry in India.

Quadrant B:

People in quadrant B are the most successful in a competitive environment because of their proactive nature and high risk taking ability. Being proactive is one of the essential traits of an innovator; this also includes intuitiveness and vision. Their high risk taking ability allows them to pursue their dream; they take the First Mover Advantage and out-smart competition by far. Sunil Bharti Mittal, founder of Bharti Enterprises, was the first person to introduce the push buttons phones in India. He saw the phones in a trade fair in Taiwan and immediately signed up an agreement which eventually lead to the roll out of Beetel range of phones in India. It is his proactive and intuitive nature which helped him to identify the need for such phones back in his country and his high risk appetite supported his instincts.

Quadrant C:

They are the last person to accept innovation. Fear of defeat prevents them from accepting new challenges. Their low appetite for risk keeps them away from anything which has not been endorsed by millions of people. These people suffer the most in a competitive environment and are generally not open to new ideas.

Quadrant D:

People in this quadrant are extremely receptive to innovation but takes calculated risks. They would generally look for low investment innovative business ideas or explore new challenges as a hobby. Some of these people generally carry entrepreneurial desires seeded deep inside them. This kind of people gets average success in a competitive environment in the beginning but always carries the potential to change the rules of the game.