Customers don’t want innovation – they want the results of innovation in the form of better, faster, cheaper products and services!
How many significant innovations has your company brought to market in the last six months? What were the results of these innovations for your customers? What significant innovations are you working on now that will deliver meaningful results for your customers in the next six months?
If you have good answers to these questions, better than your competition, then congratulations – keep doing what you’re doing and don’t let anyone in on your secrets. But, if you feel that there’s a gap between your investment in innovation and the results delivered, then this article is for you.
Cutting through the jargon, I believe there are four things you can do that will make all the difference:
- Pick the right opportunities.
- Involve the right people.
- Design the right experiments.
- Be decisive and act quickly.
Pick the right opportunities
Perhaps the single most important thing you can do is make sure your innovation efforts are focused on actual opportunities or problems that matter to your company and to your customers.
I had a fascinating conversation a few months ago with the head of innovation at a bank which had been hit with a regulatory fine. He was surprised when I asked where this was on his innovation agenda; it transpired that solving operational problems was outside his scope; he was focused on developing things that customers would find exciting. OK, fair enough, but how many of his ideas had been taken-up and implemented by the bank? None.
So, how do you surface the right opportunities for innovation?
One approach, adopted by the innovation-award winning CIO of an insurance company, is simply to ask each senior executive to identify their top three unsolved problems or opportunities.
Another approach is to focus on known areas of customer or employee frustration – as these are often the signposts to profitable opportunities – frustration is the seed capital of innovation.
To my mind, the best innovations are the ones that make your customers’ lives easier, because they drive customer loyalty and often have the added benefit of reducing costs.
A good example from my own experience is the British Airways mobile app. Once booked, my flight appears automatically in the app. The app notifies me 24 hours before departure to check-in and my boarding pass is immediately there on my phone. I can go straight through security to my gate without the need to print anything or visit the check-in desks. It’s extremely convenient for me and it’s clearly cheaper for BA.
What innovations would you like to see, as a customer of your own company?
For example, here are two things I’d like to see which might also be profitable for the relevant companies to address?
- Why do I need to prove my identity, using multiple documents, every time I need to engage with a new financial or professional services company? Surely, someone could develop a solution which enables me to maintain a single, re-usable, proof of my identity and address?
- Why do I need to have telephony, internet and media services re-installed, seemingly from scratch, every time I move into a new apartment, even where it is clear the previous occupant had these services installed already?
These are the sort of frustrations that, once solved, deliver meaningful results for the customer and save costs for the company. I’m sure you can think of more.
Involve the right people
OK, so you’ve identified some challenging problems or opportunities that could have a significant impact on your business and your customers, what next?
Well, by far the most important factor in coming up with innovative solutions is to involve a wide range of people with different backgrounds and perspectives:
- People responsible for the current situation.
- Customers and employees affected.
- Suppliers involved.
- External sources of innovation (e.g. innovative technology companies).
- People skilled in design thinking and experimentation.
- Mavericks willing to take risks.
- Leaders with the authority to decide and act quickly.
You certainly need people who are motivated to shake things up and try new things – think Robin Williams as Adrian Cronauer in Good Morning, Vietnam (an academy award nominated performance in which his highly disruptive approach to US Armed Services radio broadcasting has a massively positive impact on troop morale).
In fact, the film Good Morning, Vietnam also offers an instructive lesson in how organisations resist innovation and inoculate themselves against change as the military tries to shut him down – and remember what happens when Lt. Steven Hauk (Lt. Steve) tries to emulate Adrian Cronauer – you can’t fake maverick!
You will probably also need to engage with one or more external providers of innovative technology that might play a part in your solution – these niche companies will usually be start-ups or scale-ups and their novel ideas and approaches will be the catalyst for your own thinking.
But, one of the hardest things for large corporates to do is to engage effectively with these small companies. The problem is, you don’t have time to run an exhaustive selection and procurement process and, even if you did, you wouldn’t know what you were looking for – you’re still at the ideas stage.
You need what Forbes magazine (in July 2013) identified as “Innovation Brokers” (shameless plug for www.clustre.net) – people who can break down silos and actively support the exchange of ideas – including introducing you to proven sources of innovation.
Design the right experiments
The essence of rapid innovation is experimentation. You need to design experiments that can be initiated quickly, involve real customers, and allow you to refine (or discard) your ideas in as short a time as possible.
The bear-trap here is the instinct to build a full-blown prototype or MVP before you’ve tested your idea. Instead, make sure you do a quick and dirty experiment first before you commit significant time or resources.
Incidentally, I prefer the term “experiment” to the term “proof-of-concept” because the idea of experimentation is an open one and leads to new thinking, whereas the idea of a proof-of-concept can lead to a more closed yes/no mindset.
If your experiment is successful, then the important thing is to maintain momentum – continue in a spirit of experimentation as you move into the building and testing of your solution.
A really good example which is getting lots of news coverage (as I write) is Sainsbury’s SmartStore, till-less supermarket, experiment at Holborn Circus. This has all the hallmarks of an experiment well conceived and well executed. It’s carefully targeted and engages customers directly. While not to everyone’s taste, the customer experience looks to be a major improvement – completely eliminating the need to queue for a check-out, automated or otherwise.
Importantly, experimentation is a skill-set. If you don’t have these skills in-house then you will need to buy them in.
Be decisive and act quickly
And finally, we come to the elephant in the room. The one thing, more than any other, which prevents rapid innovation. The inability to be decisive and act quickly.
All large, successful organisations have well established policies, processes and procedures for everything from product design to customer service. And for good reason. It’s these tried and tested methods which ensure operational efficiency and guarantee standards of customer service.
Unfortunately, these constraints also stifle innovation. They inoculate the organisation from the impact of crazy ideas. I’ve lost count of the number of times I’ve seen enthusiastic executives embrace an innovative solution only for the initiative to flounder in the face of procurement policies and internal approval processes.
I think partly for this reason, most of the truly successful innovations I’ve seen has been outside the normal mainstream of the business, with a separate reporting line, a separate organisational unit or even a separate brand.
Whatever the mechanism, innovation is most likely to be successful when it is freed from normal organisational constraints and provided with the funding and authority necessary for rapid decision making.
Nobody signed-off Adrian Cronauer’s jokes.
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