Scaling Service Provider Solutions
Seven Proposals
“The real value added is the prevention of issues, rather than provision of the cure.” - interviewee
More innovative scaling support mechanics are necessary
1. African scaling diagnostics audits, frameworks, and roadmaps
A strong foundational base is fundamental to the future survival of any business. Performance diagnostics, if properly executed, help businesses assess whether the enterprise can move from startup to scale-up more quickly and effectively.
Not all incubators and accelerators perform the deep dive assessment activities that are necessary. The application process to acceleration programmes needs diligence. Service providers should collect meaningful data about ventures and show them where they are in the scale up curve and what's needed to progress further. For scaling firms, thin, generic, and cut and paste approaches simply will not suffice.
There are opportunities to consider robust scale diagnostic tools alongside much deeper internal and external analyses to help appropriately guide and support the scaling ventures. A number of international scale up frameworks already exist, but repurposing and creating contextualised African frameworks may well be valuable. These should include the following elements:
Reviewing individual scale-up challenges and opportunities as a stand alone activity, underpinned by deep scale up diagnostics and roadmaps (including follow through actions thereafter to guide next steps).
Bespoke analysis and audit which validates the product, pricing, technology, economics, customer acquisition and retention, and establishing opportunities for distribution channels, investments, and partnerships.
Interrogation and dedicated support activities with functional sprints, strategic reviews, skill-building or de-bottlenecking efforts and check-ins to keep the scale roadmap on track.
Founders diagnostics evaluations.
Pre-scale activities should include rapid sprints into the product, technology, growth and financials of a business. But longer runway and flight programmes that map out the scale vision — identifying where a business is in a journey and defining the path to reach stated goals is equally needed. With ventures receiving clear objectives, a bespoke execution plan, and hand-holding to walk (and be coached on) the arduous journey ahead.
2. Scale up programme improvements
The attributes we consider to be essential in any scale up service offering include the following:
A robust and wide-ranging practical programme that infuses new knowledge and capabilities to enable the ventures to innovate and scale. Scale-up leadership teams should be able to ‘pull’ whatever aspects of the programme are most helpful to meet their needs, as and when they need it.
A pool of “experts on the bench” with diverse skills in leadership and management, product development, talent, strategy, sales, marketing, fundraising, IP, etc. that can be deployed on demand, and can provide hands-on support to the ventures and help them solve their problems in the path to scale. An appropriate pricing model is another key element.
Clear access to finance and investment-readiness propositions. Our research has shown that capital is the number one demand of ventures (even though - in practice, at the early scaling stage - ventures are not always ready for it). It’s worth noting though that it is not always the number one need of the business.
Access to expert service/ solution providers. Great connections always help. The wrong support can be more damaging than no support at all.
Bootcamps alone simply don’t work. Our view is that ecosystem support needs to be specific, longer-run, continuous, and truly innovative. There needs to be greater emphasis on coaching for management teams regarding leadership and management dynamics, innovation and company culture building, and organisational development. All together, these elements are essential to help ensure ventures improve management and governance dynamics.
3. Management, recruitment, and governance service offerings
Ongoing management and innovation advisory support is essential to make the capital ‘sweat’ for greater, more sustainable returns. Investors should provide clear support to ensure their expectations are met, which may include the following requirements:
Recruitment of the talent needed in critical positions to execute growth strategy and boost revenues.
Governance and systems to ensure the enterprise maximises growth potential but also operates sustainably and responsibly.
Operational systems and digitisation capabilities to capture real-time data of activities and provide insights for adequate review and decision-making.
Skills development programmes, not only for leadership teams, but throughout the organisation, ensuring a better supply of talent into the future.
4. Commercial product, service, and culture of innovation implementation
Disruption today is more than just changes in technology, or channel, or competitors — it’s all of them, all at once. Studies show that there is no long-term correlation between the amount of money a company spends on its innovation efforts and its overall financial performance. Where innovation investment is concerned, the key question is not how much to spend, but how to spend it.
What also matters is a company’s openness to new ideas, its ability to manage product innovation from conception to market introduction, and its discipline in linking new product development tightly to specific sales, marketing and financial goals.
Transformational ambition is critical. Harvard Business Review reports that core (or incremental) innovations can typically generate about 10 percent of your innovation ROI, adjacent innovations contribute 20 percent, whereas transformational innovations typically generate about 70 percent of your innovation ROI.
New ideas and plans are frequently dropped due to a lack of follow through. Operational roadmapping, delivery, pressure testing, and iterative improvement are all essential. Scale-ups need to continuously innovate - at both product and service levels - to give themselves the greatest chance of success. Ongoing innovation advisory support (not episodic attempts) are vital to help identify opportunities to shift into new directions.
A modular stage-and-gate framework to help organisations solve the challenges involved in identifying and capitalising upon new opportunities. This produces creative and compelling new products and services that consumers need and want to use - robust, compelling and commercially valuable.
Diverse range of evolutionary-to-radical breakthrough concepts, targeting real needs and viable commercial opportunities.
Step-by-step demonstrations on how to progress, pressure-test and refine ideas until they are robust and viable in the real world.
Strategic innovation pipeline, defining and delineating the right sequence, speed, and priority for rolling out new concepts.
Equipping organisations and key staff with practical tools to help them identify innovation opportunities and successfully commercialise concepts.
Enhancing products/ services to delight customers, and increasing demand for these products and services.
Enhanced go-to-market capabilities and infrastructure to connect with markets and unlock customer acquisition and product distribution opportunities.
Culture of innovation programmes with cross functional teams.
Scaling ventures must continuously innovate, test, and adapt to market realities. Investors are not innovation specialists. Investors should bring in dedicated innovation experts to co-execute to help with specific strategic activities. These might include:
Innovation Audit: situational report detailing ongoing and immediately planned innovation initiatives (across product and service, internal systems and processes, company culture, with a systems lens).
Snapshot Scorecard: evaluation on quality and direction of travel of current innovation-related activity - what to start/ increase/ slow/ stop.
Future Pathways Scan: areas scoped for future revenue and growth, aligned to investor objectives and ROI pace and their timescales.
Concept Straw Man: exploration of concepts aligned to innovation opportunities to illustrate what could be realised against the untapped areas for growth.
Future Fit Innovation Plan(s) which are commercially-orientated and actionable, and which summarise and categorise the organisation’s innovation activity and future growth potential. These can be designed and roadmapped.
A growth playbook with joint (co-owned) actions with investors and ventures will ensure alignment of what needs to be done in 30-60-90 day cycles. The right expertise needs to be embedded in the venture’s management teams to help navigate the execution of the growth playbook and ensure leadership capabilities are in place to shape the firm, its culture and capacity to execute towards the investment mandate.
Note that innovation activities must be continuous (rather than a ‘one-off’ activity).
5. Systems innovation leadership for transformative change
Innovations struggle to scale due to fragmented systems, a lack of funding for implementation and poor environments for initiatives to work. As identified, in Africa often problematic systems features apply. Scaling ventures can ‘shape’ innovation systems by working with governments to help them rethink their approach or by clever partnering which allows for experimentation to occur. Methodologies and activities to convert systems thinking into real action may include some of the following features:
Applied data intelligence: sourcing exploration, interpretation, synthesis and action-standard setting.
Strategic systems design capability: critical path analysis causality and interconnectedness, network effects complexity, wayfinding navigation, risk assessment and mitigation.
New opportunity identification: spanning the establishment of a range of viable platforms for systems solution exploration.
Innovation conceptualisation: open ‘sandboxing’ exploration methodologies comprising uninhibited creative experimentation; mild-to-wild solution development, critical path beneficiary focus.
Prototype pressure testing and piloting: rapid ‘MVP’ solution cycles, real-world, real-time environment testing, user-validation inputs, co-development with downstream delivery partners to shorten implementation lead-times.
Deep partnership development with key actors to leverage network and multiplier effects.
Systems innovation is usually deemed a tool for governments rather than commercial ventures and helpful playbooks have been developed. We argue that ventures can reap significant benefits by adopting similar approaches, especially if helpfully guided to implement change. Young, innovative companies can change the way business is conducted and pave the way for others to follow. Research has identified five tactics successful trailblazers enact on top of the success factors for scaling up their organisations, as indicated by Figure 42.
Figure 42: Successful trailblazers scaling tactics Source: Scale Up Nation / World Economic Forum
Trailblazers operate in local innovation ecosystems. Four elements of ecosystem support show promise to increase chances of trailblazers achieving systemic impact:
Platforms for storytelling that help them gain much-needed credibility;
Knowledgeable investors who provide them with patient capital;
Consult policy-makers who enable the acceleration of transition in inclusive ways; and
A high degree of connectivity throughout value chains to find the right ambassadors, like- minded customers, and innovation partners.
Systems leadership concerns applying skills and capacities that any individual or organisation can use to catalyse, enable and support the process of systems-level change, as described by a leading Harvard Professor. It is comprised of three interconnected elements:
The Individual: The skills of collaborative leadership to enable learning, trust-building and empowered action among stakeholders who share a common goal.
The Community: The tactics of coalition building and advocacy to develop alignment and mobilise action among stakeholders in the system, both within and between organisations.
The System: An understanding of the complex systems shaping the challenge to be addressed.
Achieving progress on the UN global goals agenda will require a departure from traditional top-down, hierarchical and linear approaches to implementing change. Instead it will need innovative and adaptive approaches that engage broad networks of diverse stakeholders to advance progress toward a shared vision for systemic change. Scaling ventures have significant roles to play; but they will need to be well guided on driving this transformational change.
A simple illustration of some system design considerations are illustrated by Figure 43. In reality, navigating the terrain to get competitive advantage and related multiplier effects requires a bespoke approach given there are always numerous layers of complexity within, and across, the systems.
Figure 43 System ventures navigation Source: Systemic Innovation
6. Developing scale up alumni models and strong peer to peer networks
Given the paucity of mentorship available in Africa, it will be increasingly critical for accelerators and scaling service providers to themselves fill the gap by creating longer-term engagement models to help support alumni ventures:
Beyond database management, efforts are needed to meaningfully engage with past ventures - i.e. providing knowledge, tools, with a view to informally/formally developing a community of practice for sustained peer engagement.
Maintaining and nurturing relationships with alumni ventures, continuously servicing these businesses as they grow and attract funding.
Continuous peer-to-peer support: Business service providers may run a bootcamp, and see this as the end of their paid engagement. Instead they could be creating ongoing opportunities for mentoring and coaching support, and designing appropriate peer-to-peer support models. This is done far too infrequently.
7. Design conditions for real moonshot aspirations
Scaling can sometimes be aligned to holding moonshot ambition. The harsh truth is that no existing innovation process will provide a moonshot. By definition.
Existing templates, grids, maps are useful to focus and channel existing thinking and directions, but they’re the antithesis of truly original breakthroughs which never originate from ‘best practice’. Moonshots are not really even about the idea. Invariably dead-ends will be explored, pivots will be needed and hard choices made. The outcome often bears little resemblance to the original vision or preconception of what form the solution will take. And that’s to say nothing of the hard yards of what it really takes to get from zero to one.
The journey is much more important than the destination. The vision sometimes is all pervasive (e.g. landing on the moon). But often it’s just the spark to think and act exponentially. The conditions for real moonshot activities need to be favourable across sponsors, supporters, and advocates. Organisational culture must be actively open to the possibility of embracing the unknown, or geared towards it.