When we think of great innovations, many of us think of high-tech gadgets developed by polo-neck clad entrepreneurs in Silicon Valley.
Launches of revolutionary devices certainly grab headlines. Think back, for example, to when the iPhone and iPad were first unveiled; or, more recently, the buzz around the new generations of smartphones with folding screens.
But innovation is about much more than shiny technology and must-have gadgetry. It comes in many forms, it can be radical or it can be incremental, and it can happen in all types of industries, from small high-tech startups to larger, long-established, traditional corporations.
Especially in more mature economies, such as Singapore, innovation is seen as the driving force behind improved productivity and future sustainable growth. However, many traditional firms struggle to define what innovation is or overlook its importance.
Some might argue that long-established firms, especially here in Asia, are too steeped in tradition to successfully innovate. Likewise traditional businesses themselves may feel that, as they have already established and defined their market, they do not have any need to innovate.
Culture of innovation
Yet, in my research on innovation at NUS Business School, I have found many examples across Asia of traditional firms that have successfully and profitably built a culture of innovation into the heart of their business.
In a recently published book, Unlikely Innovation, my co-authors and I took an in-depth look at examples of innovation in traditional businesses, large organisations and established companies.
One case is the Singapore-based food chain BreadTalk, which has evolved from a bakery business into a publicly-listed international food and beverage (F&B) giant.
Founded almost two decades ago by a husband-and-wife team, BreadTalk has never stopped innovating, continuously iterating its product offerings to keep up with market trends and stay ahead of the competition.
Over the years, the firm has diversified beyond its original bakery business into other restaurant franchises, food courts, premium products and taken its brand overseas, trialling and launching new ranges to cater for the tastes and preferences of different local markets.
Critical to this has been a culture of experimentation, a willingness to try new things out, learn what works and what does not, and apply these to the development of new ventures and products.
Open innovation
While BreadTalk exemplifies successful internal innovation, the case of traditional Chinese medicine (TCM) brand Eu Yan Sang demonstrates another path known as open innovation, where firms cooperate with external partners and pool knowledge across organisational boundaries.
Originally founded more than 100 years ago, Eu Yan Sang has reinvented itself to become a pioneer in the modern usage of TCM techniques and ingredients. In 2016 it launched a partnership with personal care group Watsons to launch the Beauty Essence range of products – a response to the growing market emphasis on natural health and wellness.
The range combines traditional TCM values with Western-patented and scientifically-proven ingredients. By joining with Watsons the firm has been able to extend TCM’s reach to the retail chain’s younger, millennial customers, opening new markets for the Eu Yan Sang brand.