In times of crisis, businesses can be overwhelmed by the here and now and prioritise short-term objectives. But such strenuous times also catalyse new and disruptive ideas. So don’t get side-tracked by inflation and focus on unlocking your organisation’s innovation potential.
The COVID-19 epidemic, the war in Ukraine, draughts and wildfires, skyrocketing energy prices, supply chain disruptions…
- Do you have the feeling of jumping from one crisis to the next?
- Are you swamped by emergencies or the need for quick fixes?
- How many new products or services has your company launched in the past two years?
According to Kantar, there were 24% fewer new product launches in 2020-21 compared to 2018-19. And yet, we all know how vital innovation is for long-term sustainable growth. Evidence shows that businesses investing under challenging times can reap a significant competitive advantage. Easier said than done, right?
Now, innovation doesn’t happen by sheer magic. There is a science to it. And at beez, we have successfully been helping organisations drive their innovation process for 10 years.
The first step is to agree on what innovative means for your company and how we can measure it. Which indicators should you consider?
- The size of your R&D budget?
- The number of patent applications filed in the past decade?
- The number of board meetings focusing on innovation?
- The perception of your consumer and customers?
- The share of sales generated by new or recently launched products or services?
Most often, the proper measure will entail a mix of the above. It’s good to monitor the innovation intent, the development process and the outcome roll-out. All three phases call for specific support and leadership.
Which level of ambition?
When gauging the business impact of your innovation projects, you will see that they fall under three broad categories. Innovation projects can:
- Foster efficiencies within existing business:
The first category enables businesses to maintain or expand current market shares by refining existing value propositions or improving ongoing production processes. Through efficiency gains, businesses can safeguard profitability.
- Generate incremental growth:
Companies can also boost their sales and growth by exploring new distribution channels or entering new geographies.
- Create new sources of revenue:
Now, there is also innovation that will lead to entirely new growth opportunities. Such projects are usually based on entirely new value propositions and new business models.
- Foster efficiencies within existing business:
Most often organisations prefer focussing on existing (1) or incremental (2) innovation. And there is nothing wrong with that: such innovation types help to protect one’s bread and butter, i.e. near-term profitability and growth.
In today’s VUCA environment, organisations must brace themselves for more disruptive (3) innovation projects that will create new sources of revenue. They often prove much more challenging to identify and develop because they require thorough thinking about the company’s value proposition or business model. In that regard, they require significantly more budget and time.
They also call for bold leadership. A narrow financial evaluation of disruptive ideas can easily take them out of the innovation funnel. Even though such an accounting perspective can prove short-sighted.
Since I started my practice 10 years ago, clients have repeatedly asked for a “Nespresso”-like innovation… Only a few knew that the development work on the capsules and the brand started in 1976 and went on for ten years.
In 1986, Nestlé sold 875 machines to professional users. Only after the brand became widely visible thanks to the George Clooney ad campaign in 2006 did sales surge. Only then was the new “capsule” business model fully operational. In short, Nestlé has tried and failed for a very long time before it hit success. How you handle innovation shows in times of crisis: Nestlé has consistently outperformed its competitors in the past five years.
To embark a company on a bold transformation for higher growth, it is pivotal to consider a dual approach that combines consumer-centricity and collective intelligence.
At the onset of any new product development lies the understanding the needs and values of consumers and customers. Any marketer knows that. The challenge is to find the latest data and reliable sources to uncover the forces of change driving market trends and calling for innovative solutions.
That’s where a third-party such as beez can prove handy. We regularly monitor thousands of pages of data each year and have access to all the datasets. That helps us bring a fresh perspective to our clients as we leave no stones unturned. After data sourcing, the strategic part is to scrutinise and interpret the data to turn information into knowledge and actionable insights.
The second important step is to mobilise your company’s collective intelligence. Indeed, we believe that people shape a company’s culture and that they stand at the source of any growth strategy. That’s why they must be part of the ideation phase. That’s where it proves useful to bring in a facilitator that will speak on behalf of the (often forgotten) consumer and customer and ensure a fair moderation.
At beez, we are experts in managing co-creation processes (hackathon) and building consensus without making damageable compromises. In the end, such collective ideation techniques foster ownership, which is a key success factor in any business transformation.