- You might not have the time or resources to develop new products in response to a competitor’s move or a sudden change in the market. Here, you can use innovation to help protect revenue and profit by improving how you market your brand and products, being more effective at lead-generating campaigns, enhancing the customer experience, adapting your pricing models and T&Cs, using a new channel to sell products to a new customer group, and so on. These types of quick-win innovations can help your business in times of stress, without developing new products or services.
- You can build stronger customer propositions around your core products, without undertaking significant new product developments. This could include offering value-added services such as after-sales support, staff training, site audits, product development support, warranties, or other things that help your customers while creating value for your business and building new points of differentiation.
- Business model innovation provides new ways to generate and capture value, from the customer segments you target, to how you organise operations and collaborate with others. Rolls-Royce’s TotalCare is a good example. There are excellent resources on business model innovation available to help you.
- Value chain innovation will help you find higher-value positions for your business. You can take a big step or a small step along the value chain, depending on your level of ambition and appetite for risk. But be aware that a small step might create a conflict of interest with your existing customers, so make sure there is a sound rationale behind any move you make. BT, Philips Lighting, Samsung, Huawei and Heraeus Medical are all companies that have succeeded at this.
- New product innovation plays a very important role in creating new products, services and businesses and improving the performance of current products. Most companies have established processes in place to manage this type of innovation.
- Process and manufacturing innovation are also important. For example, Intel has invested heavily in factory automation so that it can bring new silicon chips to market faster than its competitors. Process innovation can also improve profitability by reducing the number of steps in a production process. This is especially relevant to products in mature markets.
- Adjacent or horizontal innovation is when an organisation exploits an existing capability, know-how or technology to enter a new market. Adjacent businesses can be straightforward to build. Dyson, for example, from its roots in cyclone vacuum cleaning technology, has expanded into fans, heaters, and hair dryers. Another example is the construction and mining equipment giant Caterpillar, which licensed its brand name and trademarks to selected clothing companies. McLaren Applied Technologies has cleverly repurposed its core technologies – monitoring the vital signs of race car drivers – to develop technology to monitor the vital signs of patients in drug trials. Harman’s expansions from home audio into the automotive audio market and Johnson Matthey’s expansion into new markets based on its technology competences are other examples of adjacent innovation.
- If you work for a large organisation, be on the lookout for innovations that come from cross-business-unit collaboration, such as combining technologies or sharing customer relationships. A good example is from Philips Electronics, whose lighting and TV businesses cooperated to develop the Ambilight TV – merging lighting technology with flat screen TVs to create sophisticated effects that enhanced the user experience. Cooperation between two business units that had not previously worked together led to a major win for Philips. Cross-business collaboration can deliver attractive growth opportunities in a shorter time. I believe all FTSE-sized companies have at least a dozen of these hidden opportunities just waiting to be discovered. Collaborative innovation is worth exploring, not only within your organisation but with organisations in your network, such as suppliers and customers. This can include collaborating with industry partners on industry-wide innovation platforms; light-weighting and low-carbon vehicles are examples from the automotive industry. Collaborative innovation does need management support, as it is not always the norm.
- Repurposing ideas or technologies from one area to solve problems in another can also lead to new opportunities. Take for example the ATM, one of the most important innovations in the history of finance. Its inventor, John Shepherd-Barron, got the idea from a chocolate vending machine! Similarly, Zipcar didn’t invent cars or RFID technology or develop the concept of car rental, but they did come up with a clever way of combining them to create a unique customer proposition. So don’t confuse innovation with invention.
Innovation creates new possibilities, like the examples above. More could be added, including innovation in IT, packaging, enabling technologies such as semiconductor technology, and so on.
Technology companies should not limit themselves to technological or product innovation. There are many options available to companies who want to defend and grow their business, and these are relevant no matter what type of organisation or industry you work in.
But before you innovate, ask yourself if you know the big and small challenges facing your business.
Where you focus your innovation efforts is influenced by your ambitions for growth and by the business and market context. Direct your innovation efforts towards the areas of your business that need attention.
Think about each question below and consider whether and how you could improve your approach to innovation.
- Which areas of your business will benefit the most from innovation, and why?
- Should your company be exploring a wider range of innovation options? If so, which ones?
- How could internal and external collaboration create new opportunities for your organisation?
For more tips on how to innovate in a corporate setting, please visit: http://www.3inno.com/our-articles
We are excited to announce the recent launch of Innovation Confessions. Innovation Confessions invites people to share lessons learned from failed innovation projects so we can all learn from them. If you have a story to tell, please get in contact:
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