“Innovate or Perish” – yes, this was a headline in a business magazine recently. Innovation is a popular term these days when discussing business. But many people do not have a good understanding of innovation or what it means for a business to “innovate.”
Innovation refers to the introduction of a new product or service – or “a new way of doing something.” Innovation also includes improving an existing product or service to be faster, cheaper or easier to use.
Peter Drucker’s definition states, “Innovation is change that creates a new dimension of performance.” I like this definition because it focuses on improved performance – which may be a new product or an incremental improvement to an existing product.
Seth Godin says, “Innovation is often the act of taking something that worked over there and using it over here.” This is one of my favorite definitions because Seth recognizes that innovation includes applying techniques from one industry in a different industry to achieve improved results.
Henry Ford is a good example of this process. He did not invent the car and he did not invent the moving assembly line. Instead, Henry Ford changed the way cars were built using a moving assembly line. He got the idea for a moving assembly line from the meat processing industry. Ford applied a process (the moving assembly line) from a different industry to manufacture automobiles. If he had limited his thinking to his own industry, he might not have developed such a revolutionary process for manufacturing cars.
Business innovation includes adding a new feature to an existing product. For example, a software product may be improved to add a new “automatic report generating feature” that simplifies the process of creating custom reports for each customer. This new feature can distinguish the software product from competitors’ products that require manual report generation, which is slower and requires additional training. Most customers will prefer the product with the faster, automated report generating feature.
Business innovation also includes the removal of a feature from a product or service. For example, a company may improve its existing product by simplifying the way in which the user interacts with the product or service. An existing product may have too many controls or menu options that make the product difficult to use or intimidating to potential customers. An improvement includes the removal of several controls to simplify the operation and make the product “user friendly.” There are many examples of product innovations that have removed features (or consolidated features) to enhance the user experience with the product.
Another innovation technique applies features in one product to a different product. This is particularly useful when a company has a successful product as well as other products that are less successful. Determine the reasons for the success of the first product and do some creative thinking to find ways to apply similar features or benefits to the other products. You can identify the reasons for the product success by asking customers, reading reviews of the product, and talking with the sales representatives who interact with the customers. Finding the key features that make a product successful provides valuable information for current products as well as future product development.
Start looking for innovation opportunities throughout your own company by evaluating existing products and developing improvements that distinguish your products in the marketplace. This can be as simple as adding a new feature or enhancing the user’s experience with the product.
If you have any questions about leveraging innovation in your own business, click here to contact me.