The definition of a FREE MARKET is unrestricted competition. Businesses are free to create their own prices, value propositions and ultimately, the customer takes care of the rest.
There are hundreds of options available for cereals, cars, ice cream but in the end, the success of any product is determined by the perceived value of not one consumer, but the collective consumer. The FREE MARKET
When working in teams are converging and trying to come up with the best options, opportunities and ideas and converging on those best ideas, the TEAM you are working with has the ability to be a proxy for a free market.
When a consumer buys anything, the amount of data that goes into purchasing anything is far greater than one single point of thinking. Take cereal for example. There is marketing, taste, price. Don’t forget tradition. We still might value a bowl of Shreddies, because it makes us think of getting up early before school on a cold morning with our mom and sitting with our backs to the heating vent eating cereal.
So, when coming up with new ideas, it would make sense that innovation teams try to input all the potential points for purchasing a product. For just one person to have the ability to have the wherewithal to perceive all of these data points with a new product is a tall order.
The advantage of converging on ideas as a team, is that off the wall facts, logical facts and emotional facts can be assessed differently by each individual, but collectively, if done properly, a well oiled team can represent a great proxy for the free market when honing in on a new idea.
So think of the converging process as a free market before it gets to the free market. Your group is tasked with coming up with the best ideas that will survive and thrive in the marketplace. Statistically, your ability to come up with successful new ideas is improved if you buy into the concept of cognitive diversity and you appreciate all “buyers” in the market. While you are innovating your team members simulate these different ways of thinking by many buyers.
The truth is, it’s not easy to hit a home run when innovating and coming up with new ideas. But it is relatively easy to reduce risk and costs of a massive failure by leveraging the combined knowledge of many, by assembling the “right team”
An automotive parts company was trying to differentiate itself in an otherwise “commodity” market. Their margins continue to dwindle as not enough differentiated them from the lowest cost provider. Over the years, the company got really great at cost efficiency. However, so did every competitor. The conclusion was simple, the company decided to find ways to add value to their products vs. constantly subtracting value.
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