Purchasers must look for innovation in unlikely places

16 May 2007
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17 May 2007 | Paul Snell

Buyers need to look beyond traditional supplier relationships if they are to find true innovation.

And if purchasers wish to beat their competitors, they must look for innovation in less obvious places.

Professor Richard Lamming, director of the school of management at the University of Southampton told delegates at a seminar in London: "If you are only looking for innovation in collaborative relationships, you are not looking for disruptive innovation."

He said if companies see their rivals being innovative, they would be able to follow and compete with them. Disruptive innovation is where competitors do not register new ideas as a threat until it is too late.

Lamming cited digital cameras and budget airlines as examples. Traditional market leaders were not concerned by these innovations when they were first suggested, because they did not threaten their business. But innovation and investment in these ideas quickly allowed them to become serious competitors.

He said the prime goal of innovation was often destruction, either of your competitors, or changes to your own processes and behaviour. "Innovation is dirty work, and people get hurt," he said.

But he added although buyers now recognise they have a role to play in fostering innovation, many do not understand what is required. "You can't just be the same and do innovation," he said.

He recommended looking for new ideas from suppliers outside a firm's sector, introducing expertise and innovation from different environments. He said buyers should not only know their own supplier markets, but also those of other industries.


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