Wednesday, May 20, 2015
Creating Value and Differentiation Through Innovation
I often hear business development folks use it in their sales pitch to describe their snow management company [often without any real proof to make it credible.] I also see it in a lot of marketing communications and web-sites. It is becoming [what I call] one of those “ad nausea business buzz-words” like proactive, think outside the box or win-win. While all of these buzzisms represent important elements of business, when used without any real supporting proof or meaningful benefits to stakeholders, they lose their credibility, relevance and importance.
I don’t want innovation to go by the wayside of overused and abused business nomenclature, as it possesses way too much value. Innovation at its simplest is the introduction of something new generated by an idea[s], whether it be a creating a smarter site-pattern for more removing snow more efficiently, or creating a more effective process to alert and dispatch your service providers.
Innovation at its best creates value, and lots of it. Most people though often associate innovation with technology related to products or services, but that’s only a fraction of its worth. Don’t get me wrong, technological innovation in products and equipment is vital for business success. Simply take a look at the innovations embedded into smart [or as I call them brilliant] phones. If somebody told you a few years ago that you’d be able to photograph a site, do payroll, perform sight measurements, route and schedule crews, invoice, deposit checks, conduct training, or create a video via your phone, would you have believed them? Take a look at Apple with its market capitalization of almost $600 Billion, with a capital B. What’s their mantra and brand? THINK DIFFERENT and it’s all based on innovation. For those of you who haven’t read the Steve Jobs autobiography, it’s a testament to innovation.
Innovation at its heart is about thinking and doing things differently. Innovation was at the heart of de-icers, snow-blowers, extendible plows with wings, multi-functional compact utility loaders that push and remove snow [they remind me of a “snow Swiss Army knife. These innovations reduced labor, time and costs, while creating greater efficiencies and safety in the field. They created value for everybody. Research shows that companies that embed innovation into their culture are almost three times as profitable as their competitors. The great news is that you don’t have to be a Steve Jobs, or an Apple, in order to develop, execute and leverage innovation. You simply need to make certain that you build innovation into your culture and business model, so that the entire team knows that it’s part of their responsibility. In other words, innovation needs to become an ongoing strategic focus and process that needs to be managed, measured and rewarded.
Innovation should be nurtured and recognized at every level within your organization, as well as with external stakeholders. Sometimes customers, suppliers and alliances are some of your best innovators. Are your plow-operators and mechanics encouraged to enhance their existing processes, or brainstorm ways to reduce equipment damage, or identify equipment that can reduce cost, increase safety and save time? Make innovation a direct role and responsibility for your team especially around resolving company pain points.
Does your management team have any innovative strategic insights that could change your business model thereby creating a competitive advantage for the company? Think Dell who had the insights to understand that customers really wanted their laptops custom-built. Dell created the “mass customization” model for laptops and made “special ordered” computers a successful business model that took the industry by storm. Research shows that high-performing companies consistently combine new technologies, products and services with new business processes and models to go to market.
Changing your business model requires looking at your existing value proposition, meaning what you sell and how you go to market, along with your supply chain, target markets and your processes. For example, a change in your value proposition may include adding new services and products to your portfolio such as snow hauling and melting, or providing environmental de-icing agents, and installing shrubs and grasses as natural snow fences.
By objectively reviewing your existing supply chain, which is critical to your success, and inviting new players to the table with different products, capabilities and business models offer a host of opportunities for innovation to occur. And don’t forget to take a look at your target market. For example those companies who have built a green business model may want to target the LOHAS [lifestyle of health and sustainability] group and BOOMER’s [those born 1946-1964.]
Innovation is an excellent way to differentiate yourself, create a competitive advantage, retain and attract the industry’s best talent while creating value for all of your stakeholders. So what are you waiting for the sky’s the limit!