INNOVATION: A TOOL FOR MANAGING UPSIDE RISK

I recently came across information about Bidhaa Sasa, a Kenyan based distribution company that focuses on providing essential household goods and solar products to rural and underserved communities. The company’s product portfolio includes a range of household items such as cookstoves, water filters, solar lamps, and sanitary products. As part of its marketing. The company maintains active social media profiles on platforms like Facebook, Twitter, and Instagram, where it shares informative content, product updates, and customer testimonials. It also engages in philanthropic activities such as donating solar products to schools, healthcare facilities, and community centers in underserved areas.

Bidhaaa Sasa organizes community engagement programs such as product demonstrations and education workshops with a view to creating and maintaining awareness about its products. It also organizes microfinance and payment Solutions such as flexible financing options, affordable installment plans, and mobile payment platforms in order to ensure its target clients are able to afford its products and make payments conveniently. Lastly, the company carries out entrepreneurship and capacity building such as training workshops on business management, sales and marketing techniques, customer service, and product maintenance as part of its community social responsibility.

The foregoing initiatives are part of the company’s innovative marketing strategy that serves as a strategic platform for driving market expansion and exploitation of opportunities. By leveraging the unique strengths and assets of local communities and forging partnerships with key stakeholders, Bidhaa Sasa creates a virtuous cycle of growth and prosperity that benefits both the company and the communities it serves. In the process, the company mitigates the risk of missed growth opportunities, potential loss of competitive advantage, loss of clientele amongst other negative effects of failure to innovate.

Using innovation to manage upside risk involves leveraging creativity and forward-thinking approaches to capitalize on potential opportunities. Rather than merely mitigating negative outcomes, it entails proactively identifying and exploiting advantageous situations. In this regard, innovation enables organizations to adapt swiftly to changing circumstances, seize emerging trends, and stay ahead of the competition. By embracing innovative technologies, processes, and strategies, businesses can enhance their resilience and responsiveness to positive shifts in the market.

Through innovation, organizations can tap into new customer segments or create entirely new markets as has been witnessed through growth in digital financial services as well as home delivery of fast-moving consumer goods. Organizations can also embrace agile processes and procedures as well as leverage on data analytics thereby helping them adapt to changing customer demands which in turn helps in improving customer satisfaction and retention. Institutions are also able to harness the power of strategic partnerships in expanding their customer base as well as enhance competitive edge.

In conclusion, when innovation is perceived as a tool for management of upside risk, organizations stand to draw numerous benefits that contribute to the overall success and sustainability. By capitalizing on growth opportunities, enhancing competitiveness, improving financial performance, fostering innovation, building resilience, and enhancing stakeholder confidence, organizations can create value, drive sustainable growth, and achieve their strategic objectives in an increasingly dynamic and uncertain business environment.

Dr. Weru Mwangi is the CEO & Lead Consultant at Ultimate Management Solutions, a firm specializing in training & consultancy in Finance, Governance, Strategy, Risk Management and Leadership Development.  He can be contacted on weru@umslgroup.com