CIM Annual Conference kicks off in search of “Disruptive Innovation”

By Charumini de Silva

The Chartered Institute of Marketers flagship event, the CIM Annual Conference 2016 titled ‘Disruptive Innovation’ held for the 16th consecutive year kicked off yesterday with an audience of over 450 people, bringing together an imminent group of personalities, experts in their fields, for the benefit of local marketers, who were thereby given the opportunity to draw upon the expertise of industry leaders in order to develop their thinking and competency of skills and network with other marketers in the country.

Founder Director of IIM Trichy, India Dr. Prafulla Agnihotri delivering the keynote address this year on the concept of Disruptive Innovation and Development pointed out that the objective of a business is no longer merely making profit, but to develop new innovative products and services that generate economic growth.

Describing the concept of disruptive innovation, he said it is a process where a smaller company with fewer resources is able to successfully challenge established incumbent businesses. 

He went on to say that disruptive innovation revolves around key characteristics such as affordability, new customers, convenience, and new performance criteria serving societal good facilitating inclusive economic growth.

Highlighting that the ‘disrupter’ leads the market he elaborated on India’s popular detergent brand ‘Nirma’ as an example and added that the company was able to cater to the needs of the poor rural at an affordable price which helped it emerge as a strong market player challenging a well established multinational company like Hindustan Unilever Limited (HUL) which already had a high end market. 

He said, Nirma as an entrant proved a disruptive beginning by successfully targeting the overlooked segments of India delivering more affordable products to the rural market segment which could not buy such products as they could not afford them. 

Dr.Agnihotri said disruptive innovation economic growth in countries like India and China has resulted in a higher purchasing power of consumers and newer segments of consumers entering the market, leading to the overall growth of market size. 

“Accept the disrupter instead of rejecting and gather what is being challenged or otherwise you are about to get disrupted,” he stressed.

Chief Guest Unilever Sri Lanka Chairman Carl Cruz said as companies tend to innovate faster than their customers’ needs evolve, most organisations eventually end up manufacturing products or services that are actually too sophisticated, expensive, and complicated for many customers in their market segment.

He said companies pursue these sustaining innovations at the higher tiers of their markets because this is what has historically helped them succeed by charging the highest prices to their most demanding and sophisticated customers for companies to achieve the greatest profitability. However, by doing so, companies unwittingly open the door to ‘disruptive innovations’ at the bottom of the market. 

Further he said an innovation that is disruptive allows a whole new population of consumers at the bottom of a market access a product or service that was historically only accessible to consumers with a lot of money or a lot of skill.

Stressing on Unilever values and history Cruz said: “The pioneering and entrepreneurial spirit of Lord Lever still continues in whatever we do; as part of our sustainable, digital or award winning marketing work that we deploy around the World. Here in Sri Lanka we have pioneered many brands such as Sunlight, Lifebuoy, Signal based on true pioneering spirit.”

Looking at factors that contribute to disruption he emphasised that we live in a volatile, uncertain, complex, and ambiguous (VUCA) world where population is growing, climate change is accelerating, water is scarce, a billion people are hungry while another billion are overweight and two million children under five years die every year from diarrhoea and pneumonia. 

“In this world, mere sustainability is not an option. We need the planet to live. We need the planet to survive,” he noted.

Noting that in today’s world many facets disrupt us, primarily driven by digital connectivity and trends he said the key to successful and disruptive innovation is to have a catalyst. 

“For leading FMCG company’s like us the traditional brick and mortar model needs to be enhanced with stronger e-commerce. Today’s leading companies are venturing out into unchartered territory building core competency in future markets; having to estimate and stretch self beyond current core —resulting in a complete disruption in the current core. Hence, constant adaptation is what is required and the appreciation that this is the future, today is vital,” he explained. 

Given the entire framework of disruption Cruz pointed out that there are many facets that impact this beautiful island nation adding: “It is just a matter of time until the hubs become a reality; then we will experience unprecedented disruption in the way we do business.”

He said fiscal policy uncertainty, natural disasters, income disparity and slow FDI flow are deterrent factors dominating current discussion forums which need to be addressed by creating a catalyst environment.

“As marketers our careers are in the best possible time periods of having steered the course towards a destination in such volatile circumstances. We need to be the catalysts ourselves that drive disruption and provide true innovation to enhance the livelihoods of our consumers,” Cruz emphasised.

Guest of Honour CIM Chief Executive Chris Daly said a key challenge for marketers is that all this technology is now advancing at such a pace that the world of marketing is changing faster than the competencies and skill sets of the marketers being employed to deliver it.

“Customer understanding has never been disconnected from technological advance, as new ways to feed that driver of innovation have emerged over the years,” he added. 

Noting that organisations fail due to bad marketing, Daly stressed: “It is critical to set up a clear innovative marketing strategy to conduct professional marketing for growth.” 

The CIM Annual Conference will see full day’s sessions today with a host of experts at the Water’s Edge. 

Pix by Upul Abayasekara