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INNOVATION: WHAT THE FUSS IS ALL ABOUT

I use the word “innovation” a lot when talking about business. In fact, I think it is very hard to talk about business success and growth without considering the role of innovation. As technology continues to advances it will be even harder to avoid it.

Innovation is a matter for any business

Innovation images on a page

If you are someone who tunes out when you hear the “I” word, it may be you have heard it so often it has lost its meaning. Like”strategy” which now means anything that includes some sort of a plan.

Or you think innovation does not apply to your business.

True, a business doesn’t have to be innovative. If you are lucky enough to be in a business with little competition or substitutes and no possibility of being disrupted – or none of this particularly bothers you – then innovation is not a good investment for you.

For the rest of us, however, coming to grips with innovation means staying in business.

What is ‘innovation’?
Innovation is often associated with flashes of brilliance and giant leaps forward. This rarely (if ever) happens. ‘Doing differently’ is not innovation. More often the ‘different’ is a tweak or a (hopefully better) way to achieve the same thing.

Innovation does not have to mean high technology. It can refer to product innovation like the Post-It note, service innovation like offering personalised design, and business process innovation such as Kanban (“just-in-time” manufacturing). As smartphones and cloud computing change the way people access information and connect, business model innovation is now the most likely source of industry disruption. Uberâ’s ride sharing service, for example, is a business model innovation for which the taxi industry was not prepared.

For something to be ‘innovative’ it has to allow people to do something they could not do before, or could not have done with the same ease, low-cost or effectiveness.

Henry Ford was the great innovator of the industrial age. He invented neither cars nor factories. It was his innovation of standardising labour to form production lines that changed the motor vehicle from luxury to every-day necessity. Applying his ‘factory modelâ’ to everything, not just manufacturing, reshaped the course of the entire 20th century economics.

When I talk about innovation, I mean ‘digital innovationâ’.
To me this should be on the top of every business’ priority. Digital innovation is not technology; it is the change in behaviour triggered by technology. Compare how long it used to take to organise going the movies with friends, for instance: who was free, what to see, who would queue to buy tickets, where to meet, and so on. Today you can do the same thing using far less effort and in a fraction of the time. If you can find a way for your business to capitalise on this sort of shift, that’s digital innovation.

Behavioural shifts are the best providers of opportunities for business. For example, the post-World War II shift in consumer attitudes has provided marketers with an extended golden era for selling things people don’t need. Our modern idea of personal health and well-being is a behavioural shift that has created a dietary supplements market that is expected to be worth $106 billion by 2017.

If it weren’t for changing behaviours and attitudes, in reality, people would have very few needs to fill.

You can’t assume the behaviours will be more of the same of those from the pre-digital era. For instance, thanks to social media, people are more socially-conscious than they used to be, and are more likely to trust peer reviews than corporate marketing.

This is why ‘innovation’ rather than ‘improvement’ is so important.

With the penetration of smartphones at 70 per cent or higher in countries including Australia, New Zealand, the US and the UK, and broadband internet over 90 per cent across OECD countries, digital technology will only cause more behavioural shifts, providing ever more opportunities for business. You cannot expect to keep riding one continuous wave; the approach is new ideas for new expectations.

It is also making easier and cheaper for startups to test the market with bold ideas. Many talented and motivated people who may have previously been at your door looking for a job are taking their chances with the market in their own enterprises. Your competition is now as likely to come from nowhere than from an existing major competitor.
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It’s simple but it’s not easy.
To find your innovation opportunities, look at how you can extend your products and services into new experiences for your customers. Can you reach your customers at a point earlier than the one where their experience with you currently starts? Or extend beyond where their experience with you currently finishes? Alternatively, who is amongst your user base that your existing capabilities can serve?

Remember that the starting point for behaviour is emotion, and experiences – not products, not services, not features and not benefits – is how you tap into emotions. Innovation, in other words, begins at that most basic level, and as far from digital technology imaginable: how your business makes or reminds people to feel.

What innovation wave can you ride?

If you would like to talk about where your innovation opportunities might lie, feel free to get in touch.

 

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