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Innovation – Aligning innovation with strategy

In the previous article I looked at the question of where to focus innovation. My approach is to firstly make innovation a mind-set and to always be on the look-out of how you can do things better, easier, faster or cheaper. If you get the little things right, the big ideas and innovations will follow. However, this “shotgun” approach will drive the incremental improvements of your organisations and create the culture of critical thinking and questioning the status quo, but this does not guarantee success, the business will still require a proper strategy to be competitive. So what do I mean by “strategy”? The strategy topic is just as popular and much debated as innovation. Defining strategy is a complex matter, so I am not taking it lightly, I just don’t have the space to discuss it in depth!
A number of different definitions for strategy exist. In its original military context, as defined by General Ulysses Grant in the 1860’s, strategy is: “the deployment of one’s resources in a manner which is most likely to defeat the enemy.” Mintzberg later extended the definition of strategy in a business context to include both strategy as a plan, “a consciously intended course of action” and as a perspective, “an ingrained way of perceiving and interacting with the world, a company’s personality.”
To me, an organisation’s strategy is defined as: a plan designed to achieve a particular long-term aim. This aim is usually expressed in the likes of profit, market share, return on investment, shareholder value, etc.
Aligning innovation with strategy
Innovation activities are inherently risky due to the uncertain nature of innovation. They demand significant commitment and often require the application of a large amount of resources. Furthermore, a decision by a company to pursue one line of innovation at the detriment of others could have a significantly high opportunity cost. The correct innovation approach is required in order to optimally use limited resources to achieve the company’s overall strategic objectives.
The term for aligning innovation efforts with the organisation’s strategy, is “innovation strategy”. Innovation strategy can be defined as a plan which will enable a company to achieve its long-term goals through the use of innovation. So, if strategy is defined as a guide for the allocation of resources in order to achieve the company’s objectives then an innovation strategy guides decisions on how resources are to be used to meet a firm’s objectives for innovation and thereby deliver value and build competitive advantage.
If the innovation strategy is not aligned with the overall business strategy, this process and these resources will not be able to contribute successfully to achieving the overall company goals and objectives.
This is great, but it’s all theoretical you say, what does this mean in practical terms? Let’s look at a short example. Two of the most well-known strategies are first to market and low cost provider, the former is where the business seeks competitive advantage by being the first to market with a new product or service, and the latter is where the business seeks a competitive advantage by offering lower price products and services. Aligning your scarce innovation resources and efforts to the first to market strategy will require a strong focus on creating new products, services and business models.
Next Time
In the next delivery I will discuss the issue of knowing why you are innovating – the drivers of innovation. I conclude with a quote by Michael LeBoeuf: “A satisfied customer is the best business strategy of all.”

About The Author

Following reverse listing, public can now acquire shareholding in Paratus Namibia


20 February 2020, Windhoek, Namibia: Paratus Namibia Holdings (PNH) was founded as Nimbus Infrastructure Limited (“Nimbus”), Namibia’s first Capital Pool Company listed on the Namibian Stock Exchange (“NSX”).

Although targeting an initial capital raising of N$300 million, Nimbus nonetheless managed to secure funding to the value of N$98 million through its CPC listing. With a mandate to invest in ICT infrastructure in sub-Sahara Africa, it concluded management agreements with financial partner Cirrus and technology partner, Paratus Telecommunications (Pty) Ltd (“Paratus Namibia”).

Paratus Namibia Managing Director, Andrew Hall

Its first investment was placed in Paratus Namibia, a fully licensed communications operator in Namibia under regulation of the Communications Regulatory Authority of Namibia (CRAN). Nimbus has since been able to increase its capital asset base to close to N$500 million over the past two years.

In order to streamline further investment and to avoid duplicating potential ICT projects in the market between Nimbus and Paratus Namibia, it was decided to consolidate the operations.

Publishing various circulars to shareholders, Nimbus took up a 100% shareholding stake in Paratus Namibia in 2019 and proceeded to apply to have its name changed to Paratus Namibia Holdings with a consolidated board structure to ensure streamlined operations between the capital holdings and the operational arm of the business.

This transaction was approved by the Competitions Commission as well as CRAN, following all the relevant regulatory approvals as well as the necessary requirements in terms of corporate governance structures.

Paratus Namibia has evolved as a fully comprehensive communications operator in Namibia and operates as the head office of the Paratus Group in Africa. Paratus has established a pan-African footprint with operations in six African countries, being: Angola, Botswana, Mozambique, Namibia, South Africa and Zambia.

The group has achieved many successes over the years of which more recently includes the building of the Trans-Kalahari Fibre (TKF) project, which connects from the West Africa Cable System (WACS) eastward through Namibia to Botswana and onward to Johannesburg. The TKF also extends northward through Zambia to connect to Dar es Salaam in Tanzania, which made Paratus the first operator to connect the west and east coast of Africa under one Autonomous System Number (ASN).

This means that Paratus is now “exporting” internet capacity to landlocked countries such as Zambia, Botswana, the DRC with more countries to be targeted, and through its extensive African network, Paratus is well-positioned to expand the network even further into emerging ICT territories.

PNH as a fully-listed entity on the NSX, is therefore now the 100% shareholder of Paratus Namibia thereby becoming a public company. PNH is ready to invest in the future of the ICT environment in Namibia. The public is therefore invited and welcome to acquire shares in Paratus Namibia Holdings by speaking to a local stockbroker registered with the NSX. The future is bright, and the opportunities are endless.