Innovation - the Secret Sauce for Success
Global disruptors like agile* digital transformation, automation, climate change and the pandemic have pulled companies into a juggernaut of change. This tidal wave of change has brought about a realisation that innovation with a focus on adaptability and resilience is the only way to survive and succeed. In fact, a McKinsey report indicates that 84% CEOs believe that innovation is critical to growth.
However, the failures of companies like Kodak and Nokia indicate that innovation by itself does not ensure success. Kodak dominated the photographic film industry with a market share of 50% globally and 80% in the US. However, they failed to ride the wave of the digital photography revolution and filed for bankruptcy in 2012. This was not because of a failure to innovate. In fact, the world’s first digital camera was invented in 1975 by a Kodak engineer named Steven J. Sasson. The company however, decided not to focus on digital photography as they were determined to promote their breadwinner— the photographic film. Similarly, though Nokia developed the first smartphone in 1996 it was too late in bringing out a viable product. These examples point to the fact that it is not enough to just innovate. You also need a strong innovation strategy to reap the benefits of your innovations.
An innovation strategy is a well-defined framework that empowers the organisation with the answers to these long term questions.
- What are the areas of investment?
- What will be the investment volume?
- Who will be the decision makers?
- What capabilities will be developed in-house and who would be ideal for partnerships or collaborations?
It is also now evident that innovation is not just the development of new products. This is just one of the many ways you can innovate and offers the lowest ROI. A smarter way to innovate is to introduce new features or facets to an existing product or service. Business innovation is the process by which you continuously improve products, operations and services to maintain your competitive advantage. The Ten Types framework developed by Dobline group (now part of Deloitte) helps organisations identify gaps and potential opportunities. It’s a table with ten elements that are categorised into three larger zones— Configuration, Offering and Experience.
The zone ‘Configuration’ is made up of four elements
- Profit model
This is the element that defines how you make money. An innovative profit model looks for ways to optimise the organisation's products and services in such a way that it provides the most revenue. The model must find a happy medium between what the customer wants and where new revenue or pricing opportunities may lie.
Organisations that capitalise on synergies with others in order to take advantage of their processes, technology, products and even brands will have a better chance of growing and evolving in the current hyper-connected world. This enables the organisation to capitalise on the capabilities and assets of others without trying to reinvent the wheel.
Structure innovations focus on the organisation's assets including human resources and other fixed assets. It can include innovations to enhance and empower departments such as HR, R&D and IT. This in turn helps organisations attract talent by creating very productive work environments.
Process innovations enable the organisation to become more agile and efficient. These innovations enable organisations to develop competencies that could lead to patents and intellectual property that in turn allows them to have competitive advantage in the market.
The zone ‘Offering’ comprises two elements as given below.
- Product performance
- Product system
This type of innovation includes new products as well as product upgrades. It is often misconstrued as the only component of innovation. However, it is just one type of innovation. Product innovation should be a continuous process that focuses on continuous improvement of the features and functionality of the product.
Products often become successful when they are bundled together with other products and services to create a positive and robust ecosystem for customers. The Apple ecosystem of products and services makes one realise how powerful this innovation type is.
The zone ‘Experience’ comprises four elements.
- Customer engagement
Service innovations speak for the product. They ensure that your product is easy to use and enjoy. They act as the bridge between the product and the customer by revealing features and functionalities. They are all about the customer experience, often elevating the most uninspiring products to become favourites.
Innovations in this sphere focus on finding effective ways to connect your product or service with the customer. While e-commerce is now a popular way to take your product to market, skilled innovators must also keep other traditional channels in mind when designing the experience.
Brand innovations are focused on how customers relate to your brand. These are strategies that are implemented across multiple touchpoints, both online and offline, to drive brand awareness and advertise your products and services. Branding strategies, when employed well, can transform your offerings into prized commodities or services.
Customer engagement is the ace in your pocket that will convert a visitor to a loyal customer and even a brand ambassador. Great customer engagement innovations are drawn from an empathetic view of the customer, their aspirations and pain points.
Business innovation is a key component for any company, big or small. Innovation that focuses on incremental improvement of your products and services ensures that you have a better chance of thriving in the future.
*For organizations on the digital transformation journey, agility is key in responding to a rapidly changing technology and business landscape. Now more than ever, it is crucial to deliver and exceed on organizational expectations with a robust digital mindset backed by innovation. Enabling businesses to sense, learn, respond, and evolve like a living organism, will be imperative for business excellence going forward. A comprehensive, yet modular suite of services is doing exactly that. Equipping organizations with intuitive decision-making automatically at scale, actionable insights based on real-time solutions, anytime/anywhere experience, and in-depth data visibility across functions leading to hyper-productivity, Live Enterprise is building connected organizations that are innovating collaboratively for the future.