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INOVATION VS EXPLOITATION

Obtaining resources to invest in research and innovation can be a complex task since there is no guarantee of seeing results within a defined time frame. That being the case, from a company point of view, it may seem easier to opt for “reliable” investments with a sense of risk that makes management more comfortable. Doing what already works over and over again sounds more reasonable than betting on something that may or may not deliver the expected results. However, this is a dangerous mindset because, in the long run, it might be more risky to continue exploiting what already works than to take on the task of looking for new alternatives, even if it means living with some uncertainty. Thomas Edison (with his current direct), Blackberry and Blockbuster are just three examples of what can happen when you stop innovating to focus exclusively on exploiting products and / or services that have already proven to be successful. In fact, such success can put companies in a comfort zone that prevents them from seeing what their competition is doing. Thinking that what made us successful in the present will keep us successful in the future is a fatal mistake if two aspects are considered:
  • The market, like a living organism, is constantly changing, evolving and has new demands.
  • Technology offers new and better solutions every day.
A new player in the market who decides to build a product that will compete with yours today will have access to fresh market information and the latest technology. Most likely, this agent will end up making a product with a higher quality at a lower price, the worst possible combination against their interests that their competition can offer. Should you just focus on innovating? The solution is not to become a full-time research center or to make innovation a law. Many projects have been lost following that trend of “innovating just because”. It’s more about innovating with clear goals, established based on what the market expects and is willing to change if the market requires it. Innovating not only to be different, but innovating in a practical way, trying to find the answers that our clients are looking for, even before they know it. So innovate or explode? The answer is a balance of both. A healthy coexistence in a constant cycle between the exploitation of the products and services that you have developed (which will give you leverage) and the innovation that will keep you relevant and will allow you to face your competition with better probabilities and guarantee the continuity of your business. Sergio Estupiñan CEO

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