A number of global companies have adopted what is known as the speedboat strategy, an analogy that refers to the advantage, agility and pace of the boat. (Photo from Bangkok post)
The speedboat strategy denotes a modern approach to radical innovation in large organizations, reflecting the agility and pace of a ‘speedboat’, unlike an ‘ocean cruise ship’, which is clumsy and clunky. slow. Most well-established business entities are as large as cruise ships. If these cruise ships have to weather the biggest disruptive storms on the planet, how can they change course in time to avoid being disrupted?
In response to strong signals of disruption, several global conglomerates have quietly formed speedboats. They brought together small teams of innovative people and created a sandbox in which to let them work on their own with their own budget unimpeded and free to explore new avenues. These speedboats use the ploy of stepping into the future and making their way for the parent organization.
The first example of a deployed speedboat strategy might be the experience of IBM. Traditionally, IBM was widely known for mainframes. As early as 1980, there were rumors that IBM would develop a personal computer. The public responded to these rumors with skepticism. At the time, IBM had the well-known reputation of âtaking at least nine months to ship an empty boxâ. In 1980, recognizing the potential of personal computers, IBM President John Opel commissioned William C Lowe to form a new business unit along the speedboat lines, codenamed Project Chess in Boca Raton, in Florida. This outboard has been given the funding and authority to do whatever it takes to bring an IBM PC to market on time. Within a decade, the IBM PC had become a household name.
In Thailand today, most of the big conglomerates and banks have set up innovation stars to deal with the urgent digital transformation. In the education sector, the newest faculty-level unit at Chulalongkorn University, the Chulalongkorn School of Integrated Innovation (ScII), was established almost two years ago as a fast star of the university to drive the innovative academy of the future.
THE EXTINCTION OF OCEANIC CRUISES
In the years to come, many oceanic cruise ships will be disrupted and overwhelmed by many speedboats. The era of cruise ships is about to end as the world enters a digital sea full of icebergs. According to a recent Innosight study, the average lifespan of companies listed on the S&P 500 since the 1950s has been 61 years, an estimated 17 years for companies listed after 2015. Given this trend, the giants of the digital world of our time, including Facebook, Amazon, Google, Apple, etc. may soon disappear from this index as well if they continue their activities as usual.
This is the reason why these digital giants continue to innovate and search for a new S-curve.
CREATION OF A SPEED BOAT
Before deploying the outboard strategy, the head of the organization must develop the right mindset in recognizing that outboard operation is a long term investment. According to statistics, nine out of ten speedboat trips come back empty-handed.
In principle, the outboard is not created to replace the mother ship but to complement it. By design, an outboard needs the freedom to operate “off the beaten track” with agility and speed. The level of delegation and mandate should also be specified in the design. Once the outboard is operational, the mother ship’s management team should avoid intervening.
Here are some tips from the experts in the literature for a successful speedboat design.
1. Outboard design. The outboard can be an internal sandbox unit or a separate entity (an affiliate). As there is little time to perfect the business plan, start-up and growth problems are expected. However, operating the outboard as a new entity will minimize possible impacts on the mother ship. Second, it’s always easier to start something from scratch, without any of the hassle of the past.
2. Recruit savvy digital champions. Without a speedboat strategy and clear mission, many large companies struggle to attract digital talent, especially champions. A separate physical space is ideal for new talent who want to carve out a space and culture distinct from that of the legacy organization.
3. Openness to a new culture. The new culture goes hand in hand with attracting the right people to the organization. Since culture is the most difficult aspect to change within an organization, a separate entity allows the speedboat to experience a new work culture without compromising the status quo on the mother cruise ship.