A leading mobile operator based in Iran recognized that the ability to innovate was rapidly becoming a key differentiator – both in its traditional mobile services market and in the emerging digital ecosystem.
A leading mobile operator based in the Middle East recognized that the ability to innovate was rapidly becoming a key differentiator – both in its traditional mobile services market and in the emerging digital ecosystem.
The operator’s main competitor had already embraced the environment. It had been positioning itself as a “digital leader,” building a strong brand that could undercut the mobile operator’s leading position on the market. Moreover, local and global application developers had entered the market with over-the-top (OTT) services that threatened the operator’s core business of voice calling and text messaging by turning the operator into a “dumb pipe” for data traffic. Finally, digital start-ups were proliferating. Riding a wave of smartphone uptake and broadband expansion, entrepreneurs were tapping both new and pent-up demand for a wide variety of online services ranging from food delivery to ride sharing to online shopping.
The operator needed to be part of it. In addition to defending its brand and market share, it saw tremendous opportunity for customer engagement and revenue in the surge of digital services. As part of its Innovation and Corporate Venturing into the new digital ecosystem, It therefore created an internal innovation function to orchestrate the development of innovative products, and services internally and through open innovation, by engaging the digital ecosystem.
After its creation, the internal innovation function remained dormant for nearly three years, without any noticeable productivity or outputs. The stalled activity stemmed largely from the failure to integrate the innovation function with corporate strategy, operating model, required capabilities, and strategy execution management, meaning the function lacked relevant KPIs, processes, and the authority to make things happen. The operator had also focused on keeping up with consumer demand, which meant resources were directed towards activities such as the logistics of obtaining and distributing SIM cards and network rollout. Finally, skill and knowledge gaps were endemic, both on a technical level and a management and process level.
The hiring of global consulting firms failed to move things forward, as their focus was mainly on creating a roadmap of innovations for the firm to focus on, while the required operating model, capabilities, and strategy execution management was not addressed. While they generally had solid innovative product ideas, the global firms’ ideas and models were a poor fit for the mobile operator and its market. The global players also did not fully check the capabilities of the innovation team nor account for the operator’s corporate structure and internal company culture; thus they failed to build up the innovation team’s reputation with internal units and external innovation partners through tangible outputs and effective communications.
If you have questions about how Synergy Consulting Group can help you develop strategy – please