‘Smart Growth’: Innovating to Meet the Needs of the Market without Feeding the Beast of Complexity
As companies struggle to innovate in today’s competitive environment, they need to continually guard against adding to their “clutter” — the creeping impact of complexity on efficiency and cost-competitiveness. In this three-part special report, experts from Wharton and George Group Consulting discuss how management can approach this problem by thinking “ambidextrously” — that is, focusing on innovation and broad exploration while minimizing the impact of clutter on operational processes and costs. Also, in the accompanying podcast (with transcript), Mike McCallister, CEO of Humana, discusses balancing innovation and complexity in the health care industry with Wharton management professor Michael Useem and Stephen Wilson, engagement director in George Group’s Conquering Complexity practice.
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How can companies innovate without falling into the trap of needless proliferation in their products or services? The key, according to Wharton faculty and experts from George Group Consulting, is understanding unmet and unarticulated consumer needs while aligning innovation processes to those insights.
It seems all too obvious that companies shouldn’t spread their innovation resources too thin. Experts from George Group Consulting and Wharton note that firms investing in product and service innovation, but not process innovation, can miss out on capturing the initial gains of market share.
Determining the financial impacts of innovation-related complexity begins with taking a close look at existing operations to understand the actual cost incurred and value generated at each step in the process — all the way from idea generation through product development, manufacturing, marketing and customer support, among other back-office functions.
Mike McCallister, CEO of Humana, one of the United States’ largest publicly traded health benefits providers, is leading the company’s change from a traditional “one-size-fits-all” health care delivery model to one in which product innovation is driven by consumer needs. McCallister spoke with Wharton management professor Michael Useem and Stephen Wilson, engagement director in George Group Consulting’s Conquering Complexity practice, about managing complexity while innovating in a rapidly changing industry.