Nonmarket Factors as a Factor of Change
For more than half of this year, we have been learning how to successfully lead change efforts. Our current focus is on increasing our ability to anticipate when a change is needed. We are deriving further insight into how to bring the outside in.
Seeing What's Next helps us determine the effect of an innovation on our industry and informs how we evaluate the impact on our specific business.
If there is change in our industry, something about our business must change. The more astute we are in recognizing the change and the more informed we are on how we should respond to that change, the more quickly we can act on it for the sustained success of our business.
Last week, we learned that Step 1 is to determine the nonconsumers, undershot and overshot customers. This is necessary in order to apply the theories of innovation to predict industry change.
Step 2 is to identify and understand the nonmarket forces that influence opportunities for change.
But a spectrum of nonmarket factors - industry standards, unions, cultural norms, the state of technological development, a country's intellectual property infrastructure, and most important, government regulation - affect the motivation and ability to innovate."
(excerpt from Seeing What's Next: Using the Theories of Innovation to Predict Industry Change)
These steps are useful from several perspectives. First, if your change effort involves needing to leverage a technological advancement (innovation), then you can use this process to determine where the opportunities lie (step 1) and what limiting factors exist in your industry (step 2).
Also, your initial determination of whether you need to change and how you need to change likely involves a prediction or observation of how your competitors are leveraging the innovation.
Take Action
Assuming you have done the work from step 1, take the time to identify the nonmarket factors that impact your business. I work in the GovCon space and government regulation is certainly one factor. Two other factors that impact our business that aren't mentioned in this book include acquisition regulation (the rules governing how the Government does business with contractors) and preliminary efforts to impact future government regulation. The latter isn't always exposed to the public but in our industry, this information can be better understood by examining the requests for proposals and other solicitations that a specific Agency is releasing.
Thanks for reading!