Most people accept that ultimately, innovation in products, services, or processes is the only real way to grow a business and create value in it for the long term. Improving efficiency and reducing costs will also create value, but in the short term only. – your ability to cut costs is unlikely to keep pace with downward pressure on prices from the market as your competitors equal, or exceed, your product/service offer.
In a rapidly changing world, it’s more vital than ever to carefully listen to what customers want and spend time, money and effort making sure you give it to them. This includes anticipating what customers might want in the future and, on occasions, leading what they want and creating the demand for your product or service.
The mistake that many smaller businesses make is to believe that this sort of innovation activity is the preserve of larger companies with comfortable bank balances – the reality is that smaller businesses, with their ability to take decisions quickly, try out new ideas and learn quickly from mistakes are much better suited to growth through innovation, but what’s needed is consistent management of the innovation process.
To start with, the key to innovation in product and services is to realise that any non-price improvement you make to products and services which creates more value for your customers is innovation – it does not have to be led by radical new technologies – very often it is the continuous small tweaks and improvements to product, services and processes which create value consistently in your business and lead to steady growth.
The key to this steady improvement is not to look for the big, expensive technological breakthroughs (although it pays to keep an eye out for them as they will happen in your market and industry from time to time) but to consistently seek new and innovative ways of doing things which customers will value. Seeing innovation as a process leads you to the realisation that, just like any other process in your business, it can be managed and led.
The keys to managing an innovation process are:-
- Be clear with your team that innovation in products, services and processes is something your company encourages and expects
- Be open to new ideas from your team – the worst possible thing you can do is to dismiss ideas from your team on the basis that they don’t have the same interest in the business as you do – perhaps not financially, but their perspectives and views are just as important as yours and very often worth listening to. Remember that in day to day operations, they’re very often closer to the customers than you. The annals of innovation are littered with ideas which failed in one market, but made it big in another and did so because nobody in the second market spotted their potential
- Try to reward your team for new ideas, good or bad. That reward doesn’t have to be financial – very often, praising your team for a contribution they have made around a new idea is enough to open the floodgates for other new ideas.
- Encourage “what if” conversations with customers – try to create conversations with customers beyond the day to day detail of prices, deliveries, etc.
- You don’t have to invent it yourself to be successful – there has never been a better time to reach out to universities and research and technology organisations – very often they’re full of ideas, but what they lack is the connection with customers to try them out. You can provide that.
- Try to see your relationship with customers and your market as a football, rugby or hockey match – to win such a match you have to do 2 things in sequence – first, you have to get on the pitch and then second you have to win the match. If your product and service equals that of your competitors in every way, that allows you to play in the match but it doesn’t ensure a win.
- Look upon problems as a learning experience – so much problem solving in companies focuses on that particular problem at that particular moment, without going to the next stage and reflecting on why that problem happened and is there a thread and connection between that problem and others you and your customers experience from time to time? If you can detect patterns, there may be underlying causes capable of being solved with a new approach.
- Finally, accept that innovation will mean failure from time to time – the trick is not to beat yourself or your team up about it, but to treat it as a learning experience and to move on quickly and try again. The best innovative companies make mistakes all the time – their trick is to learn, fail quickly and not to repeat the mistake.
David Boath, Innovation Specialist, RTC North
If you’d like to discuss managing the innovation process, please contact the Innovate 2 succeed team at RTC North on 0191 516 4400 or take a look at the programme information on our website here.
Dec 05, 2016