Innovation — everyone loves to talk about it, but it’s a rare and precious thing. Innovation is not new. Businesses have been trying to innovate, design and produce better products since time immemorial. It’s the old story of build a better mousetrap and the world will beat a path to your door.
But what has changed, and what has turned innovation into the holy grail of corporate speak, is the accelerated pace of technological transformation we have seen over the past 25 years or so. The innovation/disruption dynamic has been thrust into warp speed by a series of tech advances that have left many big companies punch drunk and reeling and have opened up a raft of opportunities for nimble upstarts and startups.
The full scale of the digital revolution is still unfolding, from the advent of affordable personal computers, all the way through to the sci-fi frontier advances we’re seeing in artificial intelligence. Something like bitcoin, crypto and blockchain is just one aspect of this multifaceted remaking of our economy and our world. Things are not slowing down. In all this chaos and flux, many see crisis, while a few see opportunity.
In Australia, as consumers we tend to be early adopters of technology. The same cannot generally be said about our corporates, who have tended to take a more cautious approach.
That’s why it is good to see a big company like Caltex embrace not only technology as a nifty tool to help do what it currently does better, but to actually confront the disruptive nature of that technology as a lever for innovation. Because there is a sometimes subtle but profound distinction between using technology to augment and complement your current business model and using it to inspire a deeper rethink of what it is your business does and what it could be doing instead.
Caltex recently launched Caltex Spark, a new innovation initiative that will see them work closely with startups and entrepreneurs to find better ways of serving customers, but also to “disrupt and challenge our existing model to take us in new directions and drive accelerated future growth.”
Caltex executive general manager of fuels and infrastructure, Louise Warner, said in a media release Caltex would partner with corporate accelerator Slingshot to disrupt its own business model and look for ideas to improve convenience, mobility, retail offers and efficiency.
“We are interested in businesses that help us find new ways and connect with our consumer and business customers. We are looking at things like new modes of transport, food on the go and how we can create a frictionless customer experience,” Warner said.
Slingshot CEO Karen Lawson said Caltex Spark will give Caltex the opportunity to collaborate with the best and brightest startups, which at the same time can benefit from Caltex’s unique understanding of consumers. She also touched upon some of the factors that will likely totally transform the ecosystem within which Caltex operates.
“With the rapid pace of innovation, the possibilities for retailers and fuel suppliers is endless. We’ve already begun to see the impact of ride sharing, autonomous vehicles, drones, easy payments, big data and logistics solutions, but we’ve only really begun to scratch the surface when we consider how these can be harnessed by a business like Caltex,” Lawson said.
We are still in the early stages of adoption for technologies like autonomous vehicles, drones and other transport and logistics advancements in areas like the Internet of Things and fuel source diversification. For a business like Caltex, the Lego pieces for this new world have yet to be assembled. No one is quite sure how autonomous vehicles will play out, but there is a high likelihood that fuel retail businesses unwilling to let go of their trusty old revenue models will have their Kodak moment.
Up until now, big retail fuel companies like Caltex have been able to maintain their position at the top of the fuel chain. But these big businesses are facing changes that could dramatically reshape how they do business and reconfigure business models and revenue streams. The classic disruption examples have become Airbnb/hotels, Uber/urban transport, Facebook/media, Netflix/TV, but there are many more.
Tapping into the creativity and insights of startups, small businesses and entrepreneurs might just give big businesses like Caltex the fuel they need to build an innovation ecosystem that turns crisis into opportunity. As the saying goes, disrupt or be disrupted.