One of the challenges faced by organizations face is in deciding where to focus their innovation efforts. Most organizations end up focussing all their innovation efforts on creating new products. Such an approach is neither wise nor adequate.
Innovation needs to move beyond new products. Of course you need to focus on creating new and innovative products. However, the focus needs to be on the customer offer and you need to approach the product innovation from a new angle of offer innovation. How do you offer a new product or service that more comprehensively / innovatively meets customer requirements? Such an approach is likely to enable you to get more value out of your offering and also address a larger customer base. Note that you may be able to move beyond products to offering service using this approach.
A more comprehensive innovation approach to growth will be what is referred to as market innovation. Here the key question becomes how can we innovate the way we expand our market? This is not about reaching new geographies for existing products; such an exercise doesn’t involve any innovation and is a function of cost benefit optimization. True market expansion results in expanding untapped customer demographics and segments through innovations in channel design, creating eco systems and business models.
Two other innovation approaches are focussed on efficiency. How do we create innovation in the way we sell and how do we utilise process innovation?
Sales innovation results from utilizing customer insights and understanding customer experience to design superior sales process and new ways of selling. Such innovation as in the use of analytics in sales, design thinking and customer engagement can result in dramatically efficient sales system.
Process innovation appears to be the least focussed approach to creating value; most organization efforts on excellence are profit focussed (rightfully so) and fail to exploit value maximization. Process innovation/improvement whether it be the use of management practices like lean, robust design, efficient supply partnerships or the utilization of IoT and manufacturing automation should also consider value maximization.
Here is a video from my You Tube channel that explains this concept.
Krishnan is a consultant with more than 25 years of experience. His purpose is to help India and it's entrepreneurs be global leaders in innovation