Innovation through Global Investment
Naresh Wadhwa, President and Country Manager, Cisco India and SAARC
Innovation is a must for the success of any global organization. Employing a multifaceted strategy to incubate it, would help earn early success. A catalyst for innovation is acquisition, designed to complement any organization's internal research and development and industry partnerships. A lesser known strategy is also to invest around the world to convert opportunities into innovation success stories.
Acquisitions are an important tool for aggressively supporting the build, buy, and partner strategy to extend an organizations market leadership. Companies must look beyond value-priced opportunities. What is most important is to identify market transitions and make acquisitions that will position the acquiring company to be successful in building and creating those market transitions.
Driving successful acquisitions enables revenue growth. In addition to business model acquisitions, companies must complement their internal research and development with acquisitions of key new technologies and products. This strategy has been instrumental in helping organizations enter new markets and expand in existing ones. Acquisitions also help to speed up time to market and bring key talent into the company.
Acquisitions must be an important part of the organization strategy to be a leader in market disruptions. As they develop technologies, companies must also be on the lookout for promising skills and capabilities that they can fold into the mix. This not only expands value add for the customers and partners, it makes the organization an energizing place to work adding entrepreneurial talent to their workforce.
The investment strategy can include primarily three categories: technology development, new business models, and go-to-market.
Organizations must identify and understand market disruptions. They must anticipate trends around the world in order to be able to gain a competitive advantage through early investments in burgeoning technologies. The acquisition strategy must align and address the world’s shifting boundaries as also the intensifying competition worldwide.
Investments in global markets must be a critical component of the overall acquisition strategy, with partnerships helping to gain knowledge and experience in markets around the world. Building knowledge of how customers engage with technology must be another goal. Investing in new business models can effectively create a bridge to reach out to new customers and partners. Selected investments in key partners are valuable because they can help capture future customers.
While investing in global markets, organizations must first test the investment waters indirectly, often by investing in venture funds. This allows the group to begin engaging with the start-ups, while helping them learn and hone their investment strategies for investing directly in the startups later. This technique can also help them sharpen decision-making around acquisitions in some geographies. Besides enabling local innovations, such a strategy helps to promote economic growth because it brings insights from various parts of the world. Researching the opportunities that will best support a company’s long-term vision and aggressively exploring them is the best way forward in order for organizations to grow bigger and better.