August 7, 2020

TEN Ways to Innovate in Business Today

1.       Product innovation

An area given most attention by businesses – naturally, without a product that can be sold there is no future for business – but it is also the least effective form of innovation in itself.

The reasons are obvious: it is usually expensive to create new, innovative products; it is expensive to launch and market; they are the easiest thing to copy or imitate; and then, the process can never stop. We have to constantly innovate product offerings but there are new ways to approach the task. Refer to #7 for ideas.

2.       Brand innovation

Businesses that are able to create a strong ‘brand’ presence or reputation, have an extra advantage of a ‘halo’ effect for their products and services. They still need to evolve, improve and ‘delight’, but the pull created by a brand makes selling easier, cheaper and more profitable.

Branding is not reserved for large companies with big advertising budgets, but it requires effort to create and maintain the level of noise. Hey, heard of SM? Are all your employees on the same ‘page’ on their ‘pages’?

3.       Price innovation

Pricing is an art – one shade lighter or darker can make a difference between a painting and a masterpiece. There is only one way to price anything: Value-pricing. Value is perceived in high or low price. Everything in the middle is doomed to comparisons and commoditization.

High value: high price. This is possible when there is scarcity; common in fashion and differentiated services. Create scarcity with value.

High value: competitive price. This is the future for success in emerging large global markets; a design driven strategy and innovation approach.

Design everything for price: product, processes, networks, channels, culture (see #9)!

4.       Cost innovation

Keeping costs low to be more profitable is critical to business success, especially for businesses wanting to take advantage of large emerging markets. For Australian businesses, traditionally, there have been two approaches to cost: off-shoring and ‘lean’. Neither of these strategies is innovative any longer, and neither helps a company be innovative on old terms.

Taking it off-shore is the holy grail of lazy marketers and leaders with short-term goals and lack of vision to consider local communities, including their employees. In its simplest form, this is a declining source of innovation. The cost advantage is fast eroding on both sides.

Lean: this approach helps eliminate detectable wastage. So does the liposuction and a starvation diet. Without culturally driven behaviours, underpinning a clear, shared goal and consistently reinforced, lean is not sustainable.

The new approach to cost innovation is through innovative strategic cost-based design that solves customer and business problems by creating value. Cutting cost by eliminating features or cheaper substitutions lowers value and can destroy the brand. Think of Qantas, formerly famous for safety and quality, irreparably damaged the brand by cutting costs where it hurt.

5.       Marketing innovation

Marketing – even if we take Price and Product out of the mix [remember? 4Ps of Marketing: Product, Price, Place, Promotion?] – offers several opportunities for innovation. The biggest challenge for businesses is that marketing has become fragmented and the boundaries of responsibility have become silo’d and ‘blurred’ between product, advertising, distribution, internal communication, and even SM strategies.

Marketing innovation like Brand innovation above is about building culture and an environment that attracts loyalty of customers and staff. There are activities to make a difference through marketing innovation: embracing technology to own new communication channels to connect with customers; creating brand evangelists (this starts in house); creating purposeful networks that help get and act on market insights before anyone else.

6.       Platform innovation

Having a unique platform is one of the strongest sources of a competitive advantage. Think: Amazon – conquered Sony’s superior e-reader because of its unique online platform; Apple – oops, Sony again – destroyed Sony Walkman and changed the music industry with iTunes.

Platforms may include an operating system (Microsoft), software others can use creatively (SM, InfusionSoft CRM), a unique and relevant dbase, or a physical venue (Harvey Norman with franchise model inside the retail shell). Platform can be anything that allows business to leverage other people’s products and services.

What is your platform?

7.       Collaborative Networks

Last year InnoFuture ran a Collaboration 21 series that threw the concept of traditional Supply Chain on its collective ear. The key principle here is that the old, linear pass-the-baton supply chain is no longer delivering results because of low agility and inability to create value. The new approach is innovation through collaborative, flexible, multidimensional networks that concurrently co-create value and win-win-win outcomes for collaborators and customers.

8.       Hybridized Market Re-positioning

“Nothing’s new under the sun.” science has now analysed all existing matter into countless, smallest elements. What’s left and is hidden in plain sight? Synthesis! Innovation happens at intersections. Borrowing from your competitors is fraught with risk. It is illegal and at best makes you an imitator. However, you can steal from different industries. Picasso once said, “good artists borrow, great artists steal”.

Great opportunities exist in putting known elements in new combinations to solve unmet needs and anticipate customers’ wants.

Cirque du Soleil has re-engineered circus experience, creating a whole new market of circus-goers. Andre Rieu re-positioned classical music experience and filled stadiums with people who never listen to classical music.

The final two points are the most powerful ways to innovate: a system that is highly relevant to the market, very hard to imitate and can be replicated in new markets.

 9.   Cultural innovation

Whether you are a Small business, or a mid to large company on an M&A path, it is equally important to develop behaviours and truly strategic values in which you and your current and future employees will deeply believe and therefore, will be able to follow without having to create a web of rigid rules.

A growing number of successful organisations start or embark on culture creation because they know that in the fast changing environment a Manager’s role and best use of their time is to create value and connect people and ideas, rather than manage people’s tasks and controlling processes.

Establishing a self-driven, self-correcting culture around a clear Vision and Mission and a simple and flexible decision-making system that provides people with ‘freedom within framework’ is the way to innovate with impact.

10.   Business Model innovation

This is the strongest form of executing a competitive strategy. Here a business is able to combine several competitive elements from the above nine approaches and together create an impossible to imitate market advantage. This is a recipe for perpetual success.

Model simplifies the business and allows everyone to focus their combined effort on what’s strategically important, always improving and innovating competitive elements of the model.

Similar to cultural innovation, business model development is a growing trend among leading companies. The exceptional companies that have already proven their value, adopt a Non-Negotiable Principles system to help them focus their strategy, identify elements of competitive advantage and create simple communication tools for leaders to drive the strategic message. This approach enables them to connect silos and implement strategic ideas faster, cheaper and more often.

Leave a Reply

Your email address will not be published. Required fields are marked *