12 Different Ways for Companies to Improve Their Innovation
Many times, competing companies will innovate along the same lines, creating businesses seemingly indistinguishable from one another. Businesses are always pushing for innovation, seeing it as the key to profitability.
But companies can become focused on the end goal, looking for opportunities in the same areas, in the same ways. Technological businesses will put their efforts into improving research and development. Packaged-goods companies will look into marketing.
This tunnel-vision view of innovation can leave good companies floundering in the wake of a business with a broader perspective.
An article by Mohanbir Sawhney, Robert C. Wolcott, and Inigo Arroniz from MITSloan Management Review discusses ways companies can innovate. They define business innovation in terms of the results it can provide for customers.
Business innovation does not necessarily come from the newest, flashiest technology. If a customer is not interested, it is worthless. Innovation should be about creating novel value – something a customer will pay for.
There’s more than one way to cook an egg
There is no one tried and tested way for your innovation to succeed. US Airline JetBlue Airways boosted profits by adding leather seats, better flight attendant uniforms, and satellite TV. It doesn’t matter how you innovate, as long as it addresses a customer need.
Business innovation accounts for all areas
You may have the best product to ever hit the market, but if your marketing of the product is sub-par, it will still fail. When innovating, you have to ensure all areas of the business are involved in the process.
In their research, the group at MITSloan examined the dimensions of business innovation. They discovered four key dimensions under which the other eight can be derived. These are offerings, customers, processes, and presence.
The 12 Dimensions:
Offerings are what the company can provide the customer with. To innovate in this way, they must be giving a customer something new and valued.
A platform is taking the common elements of the product and using them in a range of derivative inventions. Platform innovation allows you to create a series or range of products along the same line. This is cheaper than creating each product individually. It also creates greater value for customers looking for something similar, or more of the same thing.
Customers often have problems. That is why they come to you, for solutions. Solution innovation takes a customer problem and uses an integration of products, advice, information, and service, to provide a solution. For example, Roubler uses a combination of product and services in its app. This enables companies to hire a workforce, while having all aspects of their training and payroll integrated in one app.
To innovate for customers, a company would have to discover a customer’s unmet wants or needs. Additionally, businesses could innovate by finding new customer bases.
Innovating customer experience first considers every way the customer interacts with the business. How are they first met? What do they see, hear, feel? Health care provider Kaiser Permanente used IDEO, a global design firm, to help redesign their customer areas for more comfort and ease of use. Customer experience innovation changes the points at which customer and business interact to be more attractive to the customer.
Value capturing is about how a company makes profit off the value it creates. If a customer has had a good experience, or has received a service, how can you recapture that value? Innovating here requires new ways of pricing and additional options for revenue.
Processes are the way a company organises procedures and best practices. In order to innovate processes, a company might redesign or reallocate the way they are done. This could help improve speed or efficiency.
Organisational dimensions examine how a company is organised. Reallocating roles and responsibilities could increase a company’s organisational innovation. Changing goals and rewards could also allow the space for change and growth.
A supply chain is how a product, service, or information moves from the source all the way to customer or intended recipient. Hence, innovating a supply chain could mean increasing teamwork between each link or person in the chain. It could also mean streamlining areas for faster delivery of a product.
A product’s presence is where and how a product is available on the market. Where can a product be found? What kind of channel is used to make it available? Presence in new places, or creating novel ways to showcase a product’s existing presence can help innovate in this area.
Customers are connected to products, and to the company, by a network. CEMEX, a Mexican Industrial company, provided ready-to-pour concrete to customers. By installing GPS systems and a satellite communication system in their trucks, they were able to provide a delivery window of 20 minutes for their product. This was down from 3 hours, and solved the issue of customers cancelling due to the unpredictability of construction. Improving the networks that connects your company to customers can result in happier customers and a better end result.
The trademark or a singular idea attached to a brand can create a lasting impact on customers. The airline “easyJet” stems from easyGroup. The promise of ease of use has been licensed out to others such as easyCar, easyInternetcafé, easyMoney, easyCinema, easyHotel and easyWatch. This simple innovation makes clear to the customers what your aim is and what your service provides.
By looking at how your company innovates along these twelve dimensions, you can identify places for growth and change. You can also use this “innovation radar” to see how your company compares to competitors, allowing you to make changes that differentiate you from the crowd.