Innovation?.. How? 7 Places to look & 6 Approaches…

Getting your business away from price competition and into value add – is all about innovation.  A key tool to achieve this is your Unique Selling Point / Position (or even personality of you are a one person band).

I’ve covered USP in many forms over the months – especially in detail for the Mentor Club members.  Now I’d like to come back to the one point that seemingly stops business owners and managers in their tracks: innovation or more to the point – getting innovation in your business.

Let’s start with a simple definition.  What is innovation?

• A creative idea that has been made to work

Although there are variations on this – let’s not get too technical.  I think this will do. After all it covers the idea and the key element of getting it to work – just remember that not every idea works in innovation; the process of innovation by definition means some will not deliver / work.

A business that is serious about innovation:

• Connects… with customers, users and markets
• Creates… successful new ideas
• Inspires… its people to innovate

Let’s move to the seemingly impossible: How do I measure innovation?  Some say it cannot be done, some say it’s a simple catch all measure, and others that the measure should be of a process.  Well that’s clear then.  There is no established, accepted measure for innovation.  In fact it is easy to run away from the need here and say it cannot be measured or it’s like measuring the word ‘hello.’  In reality if we make it objective we can measure it.

Measuring Innovation?

Of course it ‘depends’ but let’s put three simple measures that probably cover most eventualities:

1. Measure 1:   % of revenue from products less than 1.5 / 3 / 5 years old
2. Measure 2:   The process – for example the number of ideas that get raised vs make it
3. Measure 3:   The rate of failure o r put better the rate of success

How do you get innovation in your business?

Well that’s all fine and dandy but HOW – how do you get innovation in your business?  Start by looking.  There are seven areas to look in that’s all (the first 4 are internal to YOUR business, the last 3 external)

1. The unexpected success that is rarely looked into to see how it occurred
2. Any mismatch between what actually happened and what was expected
3. Any shortfall in a business process that is taken for granted
4. A change in industry or market structure that takes everybody by surprise
5. Demographic changes caused by things like war, migrations, medical developments (such as the birth control pill)
6. Changes in perception and fashion brought about by change in the economy
7. Changes in awareness caused by new knowledge

Look at these areas, do so as a process, then make sure you stick to the process for innovation. 

Most businesses innovate without realising that they are doing it. Like all business processes, it is best carried out in a reasonably systematic fashion.

The process starts with an idea and ends with successful and profitable sales. It is easiest to describe in a linear fashion, but in practice many activities often take place together, or in a different order, and may require recycling. In general, the front end is more chaotic and the back end more defined.

Here’s a simple straight forward one that works…

• Concept – Idea Generation
• Feasibility – Proof of Concept/Principle
• Development – Development, Prototyping and Testing
• Implementation  - Marketing and Launch

Approaches to Innovation in YOUR business…

The choice of approach depends on your businesses purpose and direction, its capability, its market understanding and the size of the risk / investment available.   Sounds complex? 

Put simply there are six core options, here they are in order of increasing ‘investment’:

1. Incremental – Continuous product and process improvement.
2. New design – Using design and customisation to add value.
3. New business model – Embedding the product inside a service
4. Increasing functionality – Adding software technology
5. Applying technology – Fusing different technologies to add value
6. Breakthrough – Exploiting new technology

The first three can be loosely categorised as market pull and the latter three as technology push.

Finally…  What’s My Motivation?.. 

“How do I motivate innovation in my busness?”   I think this is best addressed in most businesses by looking at and addressing the drivers which cause the most failures to innovate.  Move away from these failings and you give yourself a strong foundation to innovate

Motivation:

• Failure to recognise change/threats/opportunities
• Lack of ambition and vision
• Risk aversion

Skills:

• Lack of market understanding
• Lack of expertise in the process
• Lack of finance

Skills can be fairly easily improved, but motivation, which is the key to innovation, is much harder.

Regards

Peter