Differentiating products and lowering prices isn’t enough. Maintaining a competitive edge involves your firm’s ability to partner up and change status quo.
How Engaging – Rather than Fearing – Detractors Paves a Path to Innovation
Stakeholder trust is essential to staying competitive. Now more than ever, organizations face government, shareholder, and consumer pressure to offer responsibly-made products and services. Failing to do so can be destructive.
Globalization and the Internet enable transnational companies to maintain relationships with stakeholders and expanding supply chains all over the world. But it’s not just businesses that are tapping into knowledge sharing.
Civil society groups, social entrepreneurs, lobbyists, activists, and any number of the world’s 50 000 NGOs are forming coalitions. These coalitions are better known as “smart mobs.” They represent highly-connected fringe groups that are eager to keep government and corporate giants honest.
It was a fringe group of farmers, consumer groups, and NGOs that shook Monsanto’s multi-billion dollar agricultural biotechnology empire. With a series of lawsuits, public outcries over impacts to human health and concerns about impoverished farmers’ rights, a smart mob cast a shadow over the company’s seed storage and genetically modified organism (GMO) crop production.
Some companies are learning to engage rather than fear these smart mobs.
Unilever Harnesses Smart Mobs to Gather Fringe Knowledge and Create New Products
Unilever’s Indian subsidiary, Hindustan Unilever Limited (HUL), started reaching out to fringe communities to assess needs and create innovative products and services.
HUL requires its managers to spend six weeks living in rural areas of India to learn about the hygiene needs and practices of the rural poor. This resulted in new product ideas, such as a combined soap and shampoo bar, and promotional programs, such as street theatre, specifically designed for poorer, rural markets. These innovations have also been adopted by Unilever subsidiaries in Brazil and other developing countries.
Engaging customers and other stakeholders on the fringe led to the creation of more accessible products and allowed the company to tap into new markets. HUL may have found additional benefit partnering with Indian NGOs or groups that advocate for under-served, rural populations.
Capitalize on Skill Sets and Insights on Systemic Issues
Smart mobs not only possess custom skill-sets and unique insight that business can learn from. They also have well thought-out concerns about and opinions on important systemic issues. Reaching out to new communities of stakeholders and finding creative ways to voice concerns and share ideas can confer competitive advantage, leading to meaningful change.
Firms can engage fringe stakeholders by extending search activities into unfamiliar fields. Metaphors such as “using peripheral vision” or “searching for weak signals” emphasize that such searching extends beyond conventional market intelligence and activities. In other words, relying solely on known or powerful stakeholders concerning existing businesses detracts from organizational transformation and creates tunnel vision. Weak signals, which are precursors to significant trends and change mechanisms, emanate from a diversity of sources, including the activist groups, social entrepreneurs, and NGOs mentioned above.
Differentiating products and lowering prices will not be enough to stay competitive in the market. Maintaining a competitive edge will involve your firm’s ability to change the status quo, partner with creative groups, and combine diverse bodies of knowledge to improve your products and foster what researchers are calling “competitive imagination.”
Smart Mobs Don’t Have to be the Enemy
Partner with smart mobs and share their unique, tailored knowledge. Reach outside your company’s comfort zone to foster competitive imagination and create disruptive organizational change.
Keep abreast of the knowledge shared by your fringe stakeholders. Stay honest and transparent, or the smart mobs will do it for you.
This piece has been adapted from NBS Innovation Executive Report.
Hart, S. & Sharma, S. 2004. Engaging fringe stakeholders for competitive imagination. Academy of Management, 18(1): 7-18.