Innovation in Business – We have heard of many major businesses and brands of yesteryear’s now reduced to non-entities. Hindustan Motors (HM) had monopoly in passenger cars till the 1980’s with its classic Ambassador reigning supreme on Indian roads. With the arrival of Maruti car and later on several new generation cars, HM lost out miserably. Likewise, Hindustan Lever dominated the washing powder market with its premium brand but Nirma came along with a more affordable product capturing the mass market and Hindustan Lever had to follow suit with a few lower priced offerings.
Nokia dethroned Motorola and other mobile phone manufacturers to number one position in 1998 but it lost out miserably to iPhone, Samsung, Sony Xperia and Motorola a decade later as it failed to update its Operating System Symbian while the whole world was moving to Apple Os or Google’s Android platform.
In today’s fast changing market where new entrants come with innovative technologies, market dominance is not for eternity for any company and they need to constantly innovate to retain their existing position.
Top 10 techniques Innovation in Business
Whether you are a start-up or an established firm, innovation is the key to success. Here are some techniques to keep the innovative spirit live in your organization and keep your market share intact.
Be curious and gather more information
Market leaders can’t remain market leaders unless have the curiosity to learn, gather more information, identifies market trends, tries to spot new opportunities by looking at the competition. There must be a systematic way to gather information, analyse and apply them to business.
Having a good library, interaction with peers in workshops and conferences, trade meetings, seminars, having interaction with thought leaders will help the company keep abreast of what’s happening in their industry. An air conditioner (A/C) manufacturer Godrej entered the invertor A/c market a bit late compared to its MNC counterparts but innovated with a 5-star rated A/C which was developed in-house. It claims to have an Indian Seasonal Energy Efficiency Ratio (ISEER) of 5.2 which is the highest in the industry. Godrej with a market share of 6% in A/Cs hopes to raise it to 9% with the innovative product.
According to David Dewolf, a contributor to Entrepreneur.com, organisations focus more on developing products, technological expertise and big data but don’t spend energy on getting more information, identifying trends and forming conclusions. Therefore, vast amount of information and data needs to be collected and analysed by the organization and there should be a systematic procedure for this.
Recognise innovation opportunities
Understand the pain points of existing customers with your products or with that of the competitors. If the industry is not satisfied with existing offerings, there is an innovation opportunity lying dormant. Therefore, every problem or crisis a product faces in the market is an opportunity to innovate and succeed. A stapler is a useful product to help hold your papers together but what if you have more than 12 papers to organize. Conventional stapler pins can’t hold more than a dozen papers. That’s when Accentra Inc, the Pennsylvania based office products company developed the PaperPro that helps to pin 60 papers together. The founder of the company, Todd Moses observed that there was no fundamental change in the product for the past 100 years and that prompted them to develop the new product which is now selling millions of units per in more than 100 countries. PaperPro’s example is proof enough that consumers are looking for function and fashion in products they buy.
Uber is another success story that leveraged on the pain points faced by commuters and travellers in cities. Most often taxi cab users were charged more, service was poor and there was no reliability regarding arrival of the cab and their pricing. Uber revolutionized car rental or hire by hooking several thousand taxi owners to be part of the Uber network and charge only for the kilometres covered and not for the return trip. As they completed one assignment, the taxi cab drivers would soon get another enquiry thanks the GPS app installed in their mobile. It also made tracking of the trip and payments easier for Uber.
Look broader, beyond industry for ideas
Most often the best ideas for innovation need not come from your own industry but from other industries. Henry Ford got the idea of a moving assembly line from the meat processing industry and that changed the whole dynamics of automobile industry not only by way of volumes but also in terms of deployment of labour.
PepsiCo was looking for a way to reduce its sodium content in its snack foods and got the solution from the medical industry. A group of researchers on osteoporosis (a condition that leads to deterioration of the bones) had created a low-sodium substance by breaking calcium into small particles, and enabling its re-growth. This technology gave the idea for Pepsi to implement them in their snack foods.
Likewise Proctor & Gamble found an anti-wrinkle solution from a polymer developed by a computer chip expert based in a European University.
Most often companies have succeeded in innovating with the in-house team and they have a bias against looking outward for solutions known by the term ‘functional fixedness’. The solution is to have an in-house innovation group that constantly scouts for ideas from other industry to be incorporated in their own domain.
Foster an innovation environment
Does your business want to do the business the way it has always done. Or is it open to change. For example, a company that has always done the ‘brick-and-mortar’ business may lose out if the trend is changing to a mix of online business with in-store trading. If the top management is not open to change, it will percolate down the hierarchy. And innovative ideas won’t come up.
The innovation group must meet frequently, gather ideas and suggestions and have brainstorming sessions with it. If possible involve the entire team of workers as limiting it to a few people will limit the company’s ability to get support and new ideas from the entire talent pool as each individual has his own talent, ideas and experiences.
It is very important assign ownership for innovative ideas and their execution. Most often great ideas don’t go beyond brainstorming sessions as there is no proper follow-up or ownership within the organization.
If you don’t encourage innovation, the result could be losing out people who go on to innovate on their own and succeed. Brian Acton who had worked for Apple and Yahoo was denied jobs by Twitter and Facebook. He teamed up with Jan Koum, an engineer who had worked with him in Yahoo. They created Whatsapp that became a huge success that it was bought over by FB for $19 bn. Acton’s stake was just $3 bn at that time.
Innovation need not be about products but workplace also
Most people think of innovation with respect to developing a new product but fail to recognize that better processes and practices within the organization can raise productivity and profits for the firm. A bad workplace atmosphere can lead to lower employee motivational levels and lower output for the firm. Google realized that workplace should not be filled with dull cubicles and walls.
Google offices have play areas, coffee bars, open kitchens, crèches, themed conference rooms, libraries and several other innovations with the objective of providing a happy environment to boost productivity. Pitney Bowes Credit Corporation redesigned their interiors to appear like a village which was calm and serene. This helped them break down barriers between people and hierarchies and fostered open communication. The company grew from strength to strength on the basis of innovative products developed as a result of better communication between employees.
Run a contest, scout for ideas from colleges
The technology and management schools have incubators that help students to come up with project ideas from solar energy, to waste management to new products using robotic technology. Some companies run contests for the public or in professional colleges and offer monetary rewards. The best ideas can become be licensed and commercialized.
Good ideas can come from the customers
By having an open communication with the customers, you can understand their pain points or dissatisfaction’s which could help you develop a better service or process. To begin with, there should be an understanding whether they really want a change in the product or service. Don’t innovate for the sake of innovation. Customer surveys, social media and market research would help reveal what changes are required by the customer.
Be futuristic and have visionary attitude
Innovation thrives only in organisations that have a futuristic view and leaders should have a vision. In late 1970’s, Ken Olsen of Digital Equipment Corporation (DEC) was doubtful if household’s would buy personal computers. Now it is common place, and DEC is no more. It was acquired by Compaq and subsequently Compaq was acquired by HP. DEC promoter found home PC an impossibility. Sometimes, it requires courage to pursue ideas that look impossible or risky.
Know how to deal with innovator’s dilemma
Many organisations face the prospect of launching a new product that is radically different from its existing offering but can’t abandon it. IBM’s mainstay was mainframe computers and even when it launched personal computers, it retained its strength in mainframes. Hindustan Lever that witnessed emergence of popular economy brand washing powders had to sustain its premium brand Surf even as it came up with lower priced offerings such as Wheel and Rin washing powders. Netflix changed its model of business from sending DVDs by post to streaming video to its subscribers without exiting from the business.
Disruptive technologies and changing trends
When Google and other search engines implemented algorithm changes and took the focus away from key words that led to destruction of several websites which thrived on copying or rewriting content based on popular keywords. New technologies or process can be disruptive but ultimately it helps the mass consumer. Google’s effort was to ensure the best search results for the internet users while some disruptive technologies led to better convenience for consumers. Skype enabled long distance calls easier, iTunes gave a better choice over record stores and Craigslist offered a better alternative to classified ads.
There is a belief that innovation is for the start-ups and not for market leaders. However, it is far from true. Innovation can happen in any organization where there the cultural mindset is tuned to finding solutions to problems in a creative way. One way to learn how to innovate is by learning the lessons from leaders in the field. The Forbes list of innovative companies are drawn from technology, ecommerce, pharmaceuticals, automobile, food and beverages, consumer products, credit cards, IT industry and so on. They include small and big brands worldwide.
If the leadership and work culture is unsupportive, that is a barrier to innovation, according to IBM Global CEO study. Disruptive innovators have the qualities of associating, experimenting, questioning and networking on their new ideas. When there is an atmosphere of ‘fear’ in the company, innovation cannot take place as no leader will be willing to take any risks.
It has been proven that best performers in S&P 500 list have been consistently innovating since 2000 and they have not been much harmed by the technological disruptions and financial crisis that spelled doom for the average performers. When the top leadership shows passion and the courage to implement new ideas, they percolate down the organization.
There is no substitute for hard work and there’s no magic in innovation- it comes through sustained efforts, thinking and conceptualization. Organizations that are focused on the short term and pressure to show topline growth, more bothered about quarterly results may lose sight of the long term.
When managers are rewarded for their ability to innovate rather than running the show status quo and creativity is celebrated, results would be much better. Innovation is win-win for both the consumer and the industry.
Here are some articles that will help you to get more detail about the Innovation so just go through the link
- Why Innovation is The Most Critical Aspect of Big Data?
- Big Data: Confluence of Technology & Business analytics
- How to Conquer Fear Level & Get Ahead in Business?
- 8 Effective Ways How to Be More Innovative Every Day
- 7 Innovative Techniques to Be a Successful Market Leader