09 Mar CxO Series: Play a different innovation game and win
Reading time: 7 minutes –
Innovation is the silver bullet for long-term growth. Innovate or face disruption is the message we hear from almost every senior executive, strategic advisor and consultant. We also hear that innovation is at odds with short-term earnings and it is expensive. To have any chance of coming out ahead in the innovation game, we better be prepared to change our short-term thinking and take bigger capital risks.
Well this is what many people would have us believe. From consultants to journalists, there is often a hype and unquestioning view of what innovation looks like. A view that it requires an audacious vision, commitment of many resources and approval of large budgets. The worst part is that this view is not helping companies innovate but instead restricting innovation and making it harder to execute.
Who said innovation has to be complex?
It is true that making commercial space flight a reality is highly audacious and innovative. It also comes with complexity and huge cost. Innovation in large corporations, maybe like your own, also have big audacious goals. Building a completely new product aligned to the emerging hype in the markets or entering completely new verticals. It is a growing trend as the fear of disruption is increasing in business culture, and for good reason. It is often assumed that the common approach of big and bold innovation is the only way and that it must come with great cost and complexity.
Many of us have thought-up and directed innovation projects that fail to gain traction, are met with management resistant or end up fizzling out in the shadow of a well-funded new venture. The very approach to innovation, born from the way we define innovation, can often cause problems.
Who said innovation should be complex, expensive and unknown? The reality is that innovation does not have to be about building the next rocket ship.
We suggest taking a very different mindset to innovation. One that encourages us to think about innovation without so much complexity. Without focusing on what we should add but instead focusing on what we could remove. Without focusing on what we can invent but instead focusing on how we can leverage what we already have.
The theory of simplifying innovation, increasing customer value and reducing cost is not new, yet it is being lost in the hype of innovation. The book Blue Ocean Strategy was published over 14 years ago and for anyone who has not read this, it is a great starting point to challenge how we view innovation. The best part is that taking a different approach delivers greater success whilst saving time and money. The challenge of balancing short-term gains with innovation is no longer such a headache.
Who said innovation requires huge capital costs?
In a recent talk to over 20 retail banking directors in Singapore, I asked them what assets they have that are both costly and underutilised. One answer they gave was physical retail space. Now common innovation approaches would have us building the next mobile digital bank or FinTech payment innovation, only for it to take years of development and succumb to disruption from a well-funded emerging technology player.
Instead of building a rocket ship, leverage the assets you have.
In Singapore, retail space is expensive yet many industries rely on retail space for their basic operation. Take the trendy coffee joints that appear every year in what is a bustling F&B market. The best coffee spots grab the loyalty of consumers yet also battle with the same eye watering rental prices. The retail banks already take on the cost of physical space and this provides an opportunity to get creative with their business. Partnerships hold some of the best innovation opportunities when they are seen as an ecosystem, not only as an industry tie up. A retail bank can partner with a local coffee company and allow them to run their coffee business from their retail space. Imagine a bank also being a trendy coffee joint? Imagine how this breaks away from the expectations of what a bank looks like? It is certainly innovative.
The bank gains brand kudos for a unique customer innovation and brings in a captive audience of people who may never have even walked into their banking outlet. People drink coffee and hop onto WiFi, all in a space they control. The opportunities for natural marketing and consumer engagement become even more effective than any digital campaign. They generate revenue from their own assets, reduce costs and provide a win for a local coffee business. All within a budget that is no more than what is thrown away on Google ads and social media campaigns.
Who said innovation needs to be outside your comfort zone?
I worked for some time in a listed traditional media company, helping them navigate the disruptive digital changes impacting their business. We all understood that news was increasingly being consumed on mobile and that consumer behavior was moving away from single-source to social news and ‘Flipboard’ style aggregation.
Common innovation approaches would have led to the company building another news app, with a feed of their own news content being published to a mobile app. The problem here is that consumers did not want single source news and it would require a huge amount of effort to develop and market yet another news app when Yahoo, Google and Flipboard were already firmly in the palms of their audience.
We applied a different approach, asking what their journalists do every day as BAU. The answer was they not only produce articles for the company, but they read page upon page of articles from all the other news companies. They also post their own articles on Twitter, Facebook, the company website, the radio shows and the printed publications.
So we thought about this differently. We implemented a simple in-house browser tool that allowed their journalists to share an article they have read, along with a quick synopsis and critique, and publish this straight to a mobile news app. The article could be from any source and sit along side their own company content. After all, they read the news as part of their role as a journalist and they have the expertise to curate and provide insights into content so that the readers benefit from their time and knowledge.
The app became a huge success and required little change to existing operations. What they had built was an innovation digital product that instead of being a cheap imitation of the apps coming from the tech giants, it was a unique digital product that gave reader value over and above what the news aggregators could. It brought social, proprietary and external news into a unique stream. At the same time giving their journalists a feeling of fulfilment as now had their own streams within an app instead of being a footnote on an article.
Changing the way we approach innovation.
There is in no doubt that innovation is critical for all companies, large and small. Company executives are often the most vocal champions of innovation. I am yet to find a CxO who doesn’t sight innovation as one of their top priorities. The danger is that with this focus on innovation, the principals behind it can be lost in the hype. The strategies are set in motion by others towing the typical innovation train.
The problems begin when ideation is supported by advisors who view innovation as a rocket ship, not innovation in value. The next issue comes when an innovation mandate flows downwards to managers who, when faced with the unknown, resist risky change in favour of short-term gains and job stability. By taking a different approach away from the typical blue-sky, big-bang innovation, there is no longer so much resistance and more chance of success.
As innovation advisors, our role should not be to overly complicate innovation or follow hype in order to extract huge day rates. This applies not only to product innovation, but also to other areas such as marketing, consumer experience and branding innovation. Our role should be to help everyone we work with, from startups to big business, disrupt and innovate in a better way. A way that is not at odds with a clients existing shorter-term business priorities. A way that has a better chance of success instead of ticking the ‘innovation’ box. The outcomes of a different approach are no less innovative, they are just more attainable and more likely to grow a business so it competes with disruption instead of being run over by it.
Innovation has many forms and finding the right one doesn’t always mean accepting a long-term, complex and costly approach. Even when you know you can change the game, applying a different approach can fine turn the most ambitious ideas into something more executable and more likely to succeed.
Indeed, the biggest barrier to innovation may be the hype around innovation itself.
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