By Caleb Dean
The Merriam Webster Dictionary definition of the word scrappy is: having an aggressive and determined spirit : feisty
The definition I prefer is one that I found on a slightly less official source, yet a source that, I believe, more accurately represents the way people use the word currently.
Urban Dictionary, more specifically the user skippy88, defines scrappy as: "seemingly small and unthreatening but shockingly able to kick your ass and anyone else's." Here's how it reads in a sentence: "Look at that scrappy lil dude over there. He just beat the crap out of those punks."
Nilofer Merchant recently wrote a series of blog posts for the Harvard Business Review laying out the new rules of doing business in what she, and many others, are calling the social era. The social era is defined by our society's move toward social media to connect and how our ability to be so connected and in contact is shaping our expectations and experiences. She states that the new rules of the social era are based the fact that companies must now be fast, fluid, and flexible to thrive. Rather than gaining superiority through size, companies now must be lean; rather than linear (like Porter's value chain model), the social era is fluid and conversational; and, rather than telling customers what they need, companies must share and collaborate with their community.
I agree. I like to think of the companies that will define the new economy as scrappy and these rules paint a high level picture of how a company can best thrive in it.
So, what does product innovation look like in a scrappy economy where to thrive our companies must be lean, conversational, and collaborative?
I believe people are increasingly wanting to feel connected to the brands they support and increasingly see purchases as investments, not just in quality products, but in the companies that produce and sell them. This is especially true in the local movement. People want to support their neighbors' restaurant, the farmer they like talking to at the farmers market, and the local retail establishment that goes out of their way to make their favorite products available.
Local businesses (some) are able to innovate at a high rate, in part, because they are in close contact with their customers and other stakeholders. Small local businesses are inherently lean, conversational, and collaborative. Small local businesses are the original scrappers, able to learn quickly, adjust, and innovate solutions as new market pressures and opportunities arise.
In this new economy, to stay relevant, companies must have the ability to innovate products at a high rate. Because the times we are operating in are also increasingly social in nature, collaborative development of products is crucial to the success of companies making and selling goods.
The below graph represents the rate of product innovation increase as new stakeholders are included in the process of the development of new products. Consider the example of a small manufacturer of high-end shoes that has grown from a small local shop to a company selling their products to customers in multiple countries through their website. The founder working by him or herself can innovate at a certain rate, add employees and the rate increases. Enter vendors, and now their working with new resources, capabilities and understanding of the market. Next, to increase the rate of innovation, the company seeks product partners, each invested in the others' brand and success, innovating products together, sharing knowledge and resources. Finally, what does it look like if customers are intentionally involved in the innovation of new products?
Of course, customers are always considered when new products are developed by any company but consideration is no longer enough. For customers to be truly invested in a company and their products they must feel invested in. Just as customers of small local businesses have always had a voice in the establishments they support, because of technology and the connectedness it brings to society, everyone has a voice that can be broadcast and picked up almost anywhere at anytime. Because everyone has the ability to broadcast everyone has the opportunity to be heard. This connectedness allows for the incredible opportunity to not just consider customers in the innovation process but to collaborate with customers.
This ever increasing interconnectedness allows lean, conversational, and collaborative businesses to thrive. It allows the scrappers to kick some ass.