The business world undergoes constant change in terms of technology and consumer behaviour. The question each executive is facing is how to cope with this ceaseless transformation.
The arising challenges have been forcing many organisations to revamp themselves, explore new strategies, and adapt their businesses to the evolving environment through many different approaches, from investing in startups to forging business innovations to collaborating with business incubators, both run by private companies and leading universities that provide platforms for students to showcase their skills.
It is also possible for business organisations to acquire innovations from the “internal” process rather than reaching out to “external” support. Adopted by leading global business organisations, this strategy called Corporate Incubators is proven to drive innovation and change while offering new experiences to be reaped along the path to a new business.
For over 60 years, SCG Home Business has been serving Thai customers as a distributor of construction materials and home products through a network of dealers. It integrates the concept of Corporate Incubators into its innovation strategy by establishing a new business unit called Nexter Incubator to undertake this important task.
To this day, it’s been five years that Nexter Incubator has been “Learning-Trying-Building” and nurturing an internal start-up process for many businesses.
“Learning” is to create a healthy atmosphere for Open Innovation by providing opportunities for everyone in the organisation to share and welcome new perspectives, to challenge themselves and get out of their comfort zone, to be creative, to point out what they see as customers’ pain points and to brainstorm for the best solutions. This process will allow us to discover talented employees with the potentials and passion to transform themselves into “founders” of new businesses.
Once new business founders are identified, we move on to the “Testing” stage in which we build a conducive environment for work and creativity, and adjust business processes to encourage trials and errors, or “a sandbox” which is of great importance.
In the early years of Nexter Incubator, we experimented with employees by challenging them to come up with new ideas to see how many of them were interested and ready to create something new. A number of employees showed up with proposals, some of which were rejected because we found, through interviews with clients, that such needs did not exist. At the same time, ideas with business potentials and supported by real customer needs were put to the test. We have streamlined and shortened business process to facilitate experiment and enable teams to quickly find the right business formula and meet customer needs.
Once we have tested the business feasibility of the ideas, the next step is “Building.” We would discuss with our business founders two different business practices: spin-in and spin-off. The spin-in approach will integrate new businesses into the core operation of SCG Home Business while the spin-off approach will be implemented with SCG employees who have been trained in the incubation process. For the latter approach, the ideas will be developed into independent businesses, and the founders can freely seek investments and funding. However, the spin-off businesses will have another role to play as strategic partners of SCG Home Business.
Nexter Incubator’s “learning-testing-building” process incubates an unbroken string of new businesses to meet the needs of homeowners in the market who wish to “think, build, repair, and live” with quality, while strengthening the business of SCG HOME, an omni-channel retail store of SCG Home Business. Here are some examples of successful businesses developed by Nexter Incubator.
“Design Connext” is a platform for people who are “thinking” of building a house to be able to design their dream house. The platform will match homeowners with designers who are compatible with their style, budget and personal needs. SCGHOME.com is an online platform of the SCG HOME store, providing homeowners who are “building” their homes with information and access to home products and services with greater convenience. Q-CHANG is a platform for homeowners who want to “repair” their houses and are trying to find skilled and reliable technicians. This platform brings together quality technicians, artisans, and a full range of repair services, from installations, extensions, renovations and domestic work, to ensure that homeowners find the services they need. Q-CHANG provides services across Thailand with more than 1,350 teams of high-skilled technicians and has served more than 65,000 customers, generating over 130 million baht in income for technicians. Another home-related platform developed by Nexter Incubator is My Home, an application that allows homeowners to maintain their houses, solve problems before they escalate, and access other home-related services to “live” happier at home.
According to Nexter Incubator, the key factor that keeps innovation thriving is employees because they are the ones who work closely with customers, recognise problems, and thus can come up with solutions that not only solve problems but also provide convenience to customers.
Besides recruiting the best talents, Incubators also need to cultivate new knowledge about the businesses and carefully monitor growth. As the businesses mature, it’s time to look for new models to propel future growth. For example, at the beginning, Q-CHANG was different from what it is today. Thanks to the customers we have served along the way, we can gradually refine and improve a more suitable business model.
Not all businesses born from the incubation process are successful. It is found that only one out of ten ideas can be further developed into a real business. However, ideas that didn’t bloom are not total failures. In return, we have found employees with potentials, courage to leave their comfort zone, and experiences from working with customers. We will help the employees in this group continue to grow their potentials to support the Core Business of the organisation.
In other words, the incubators of Nexter Incubator are a great weapon to help businesses “release a punch” that is more targeted, create competitive edges, and accelerate business growth.
The Nexter Incubator’s innovative path does not stop here, but branches out to new trends and interesting business models, such as Healthy Living, Smart Living and Net Zero Living.
When large enterprises are finding it difficult to come up with innovations and keep pace with the ever-changing business environment and consumer behaviour, business incubation is another strategy to sharpen competitive edge and accelerate exponential growth for organisations.
