Saving the High Street – Is Mary Portas missing the point?

I must admit, as a consultant, I do love watching Mary Portas do her makeovers on the high street.  I find her smart, witty, insightful and passionate and usually right.  So I am delighted she has been given the job of saving our high streets by Mr Cameron.

However, having just read her article in the Telegraph I am a little worried that the very thing that has made her successful may make it difficult for her to find the right solutions.

http://www.telegraph.co.uk/finance/newsbysector/retailandconsumer/8526356/My-job-is-to-save-our-high-streets.html

In her article Mary already seems to be indicating that the solution to having a thriving high street is to generate a cadre of strong, talented, independent retailers freed from red tape, parking restrictions and planning legislation.  Now whilst I think that this would be an excellent idea and will work well in middle England, it seems to me to ignore the fact, that in our digital age, most people are not “going to the shops” anymore - they are buying online.  In a bargain centric, time poor, tech savvy world it’s just easier (and often cheaper) to buy online and no matter how attractive we make the high streets the working masses are unlikely to return as “shoppers” in the numbers required across the country to make the local retailers viable.  So in my view the solution to saving the high street is not to view the high street solely as a market place but to totally rethink it and repurpose it.   We do need the masses to return but it is unlikely to be shopping that draws them back.

My suspicion is that we need to repurpose the high street to specialise in offering service rather than sales.  We need banks that aren’t selling financial products but that are money advice centres.  We need business centres where independent businesses can find cheap office space and shared office infrastructures offering community and mutual support, we need community centres that are hosting meaningful activities for young people, we need entertainment complexes that engage and involve the local community and yes we do need a small number of those strong, competent independent retailers and coffee shops but they will not be enough on their own.

So best of luck Mary – we really need you to succeed – but can we think a bit more broadly than just retail.

Being Innovative – How to get started 3: Understand the level of innovation you are looking to drive

In this blog I want to cover one of the biggest challenges that CXOs face when driving innovation – namely being able to describe what innovation is and what innovation isn't.  This is not as easy as it may seem and this blog is certainly not long enough to rehearse all the arguments, so let me slide right to the point of providing you with a framework I use to help clarify the debate.  I am by nature inclusive so I have developed a broad framework through which to look at this thorny issue. 

To me innovation can be generated at four different levels.  Each level is fundamentally different from the others.  Each level requires different investment profiles, governance and disciplines to deliver its outcomes.

Level of Innovation - Business Enhancement

Key Features - Packaging and Sharing existing IP, Best Practices etc across an organisation.  Continuous improvement.

Infrastructure Required

·         Excellent internal knowledge management capability. 

·         Rewards given for knowledge management/sharing. 

·         Executives targeted on uplift/savings gained from demonstrable adoption of best practice

·         Local governance process required to manage release scheduling & change management

Expected RoI

In the range of X to 2X (year 1) and X to 4X (year 2 +) where X is the cost of delivering the infrastructure required

Good Hit Rate – 1:3

Who’s Good – Samsung, Tesco

Level of Innovation - Organic Market Expansion

Key Features - Using your own resource to develop new products, services and business models to expand the current market

Infrastructure Required

·         Substantive innovation governance model and process required

·         Access to ideation sources secured

·         Access to prototyping capability secured

·         Substantive seed funding secured

·         Executives targeted on uplift/savings gained from demonstrable adoption of new products, services, models etc

·         Agreement on “what does success look like” – i.e break even Year 1, 2 out of 10 ideas generates benefit Year 2 etc

Expected RoI

In the range of -Y to Y (year 1) and –Y to 10Y (year 2+) where Y is the cost of delivering the required infrastructure

Good Hit Rate – 1:8

Who’s Good - Philips, Unilever

Level of Innovation - Inorganic Market Expansion

Key Features - Partnering with 3^rd parties to develop new products, services and business models to expand the current market

Infrastructure Required

·         Substantive alliance governance model and process required

·         Effective collaboration culture –capability for creating and utilising partnerships and alliances (including legal support) secured

·         Substantive funding secured

·         Executives targeted on alliance benefits

·         Board level mandate secured

·         Agreement on what success looks like – e.g. revenue derived from partnerships and alliances = x% of total revenue by end year 2

·         Can require M&A capability

Expected RoI

In the range of -Z to Z (year 1) and –Z to 10Z (year 2+) where Z is the cost of delivering the required infrastructure

Good Hit Rate – 1:5

Who’s Good – Google, Microsoft

Level of Innovation – New Market Development

Key Features - Developing new products, services and businesses to create new markets

Infrastructure Required

·         World class innovation governance model and process required

·         Access to multiple ideation sources secured

·         Access to prototyping capability secured

·         Access to incubation capability secured

·         Substantive funding secured

·         Executives targeted on revenue/profit  generated from launch of new businesses

·         Agreement on “what does success look like” – i.e 2 new businesses launched by Year 3

Expected RoI

In the range of -Q to Q (year 1/2) and –2Q to 100Q (year 3+) where Q is the cost of delivering the required infrastructure

Good Hit Rate 1:10

Who’s Good: Apple, 3i, Google

As the above demonstrates Innovation comes in many shapes and sizes.  A first step is to figure out what outcome it is that you actually want.

More to come on Innovation in a future blog