Five Steps to Making Innovation Profitable & Successful
1. Big goals
The goal of innovation is to strive for disruptive innovation, not just to add value to a product.
Value-added innovations are small improvements to existing products and services, like adding a new bell or whistle to the product, without major changes to the product or adding significant value to the customer service.
Disruptive innovations create new products or provide new services that solve customer problems in entirely new ways. It fundamentally changes the customer’s perception of value and can actually put it on the market, and the whole industry is dumped for this product. Often, disruptive innovations solve problems that customers don’t know they have, or that customers can’t articulate.
Most companies advance value-added innovations structurally and theoretically. Rather than coming up with outright innovations, R&D teams strive to expand and improve existing products and services. Companies reward innovations that make products work faster, serve better, and cost less. But there is no reward for questions that shake up the status of the product. Managers are trained to protect the brands of existing products rather than finding ways to obsolete them.
Therefore, advancing disruptive innovation requires finding extraordinary ways to manage the innovation process. It involves asking questions such as, “What is the purpose of our innovation? Where do we find new ideas? How do we capture innovative ideas as they emerge? How do we track customers’ changing needs? How do we measure customer value? How do we reward innovation? What message does rewarding (or not rewarding) send employees?”
Value-added innovations are usually inexpensive and easy to succeed. However, it is difficult for this kind of innovation to achieve leadership in the market. Disruptive innovation, on the other hand, is time-consuming, expensive, and has a high failure rate. But once successful, the rewards are huge.
2. Involve customers in innovation
A recent comparative study of future cell phone service and new product ideas was presented by customers from internal sources, namely professional developers and technologists. The researchers found that in-house experts could come up with more new product ideas and actually bring the product to market. However, the more new product ideas customers come up with, the more they can address their perceptions of product value.
Involving customers in the innovation process may take longer and cost more, but it greatly increases the likelihood of successful new product development. It also keeps you connected to the problems your customers are facing and solve them much faster than you think. Your customers represent a rich source of new product ideas, and involving them in the innovation process has other benefits, too, in that it strengthens the customer’s bond with the business and increases customer loyalty to the business.
However, before inviting customers to participate, I strongly advise against letting customers know about your existing vision for innovation.
We often fail to recognize that people’s inherent beliefs and assumptions about how things work can deeply affect the way we think and make decisions. Especially when the company has been serving the same customer for a long time, we think we know what the customer wants and needs. Therefore, we rarely spend time torturing our attitude and trust to customers, but in a rapidly changing market, Those stereotypes and assumptions will soon be eliminated.
Unless we recognize and let go of our outdated views, attitudes, and assumptions about customer relationships, we can only benefit by inviting them to be part of the innovation process.
3. The process of managing innovation
Many people believe that in order to ensure the success of innovation, the most important thing in all work is to propose a rich variety of innovative ideas.
It’s not just that.
In order to achieve the return on innovation, the innovation process must be carefully managed from beginning to end: starting with the generation of the idea, followed by the evaluation of the idea, and then the process of implementation. Envisioning is not innovation, unless you do produce new products or services for the market, and customers are willing to pay for your products and services.
Manage the innovation process, starting with finding the innovation model that works best for your business, and formulating innovation strategy goals to guide your efforts. Recognize the value of a close relationship with the customer, and proactively seek ideas from many different channels. Most importantly: Train your management team to recognize breakthrough ideas and tactfully steer people toward disruptive innovation ideas.
4. Build a culture that supports reform and innovation
For the success of an enterprise, innovation needs to be an integral part of the company’s production and operation. It must be an uninterrupted process. The company cannot stop production and operation to find better ways to increase the value of the product, so this requires a culture of long-term support for innovation .
Build a culture that allows innovation to evolve, with a clear definition of what successful innovation is for your company. A blueprint for the future drawn: When innovation becomes a way of life, how will it benefit everyone involved, and what the management of the company should look like at that time.
Develop the habit of constantly challenging the company’s assumptions, so that the company’s operations, markets, and products will not become rigid, because we often challenge ourselves. Teach your employees to think differently so they can see the world in new and different ways.
Tell employees how to participate in innovation and at what stage in the innovation process. Ask them about their ideas, processes, and workflows for improving the product. Keep them open and honest with management.
Development teams need a variety of techniques and analytical methods, and learn to relax from tension, arguments, and competition. Companies provide continuous feedback and rewards (publicly and privately) for their R&D activities, in most cases, not only with verbal rewards, but also with actions to demonstrate corporate support for innovation.
5. Look outside the business
For most companies, innovation is an internal process. The generation and development of innovative ideas, and the talents, technologies and resources that bring products to the market come from within the enterprise. In a fast-changing world, this approach can lead to satisfactory results for businesses.
However, in the fast-changing world of late, relying solely on in-house innovative ideas means that there are faster and more nimble competitors in the market that will beat you with new products or services. As a result, forward-looking companies are experimenting with innovative models that combine internal and external resources.
Some companies have successfully achieved a “joint development” model, which draws in ideas from external sources to enhance internal innovation. In other respects, this model brings the R&D center closer to raw materials, labor and envisaged resources. In addition, it taps the ideas and resources outside the enterprise, so that your new products can be put into the market faster and at a lower cost; thus giving you a good chance of success.
The next generation of market leaders will do more to succeed than just brainstorm. They will set lofty innovation goals, engage customers in innovation, establish a suitable innovation culture, and stand in the company to look further out to obtain innovative ideas for new products and services. In short, they will manage the process of innovation, because the survival of the business depends on innovation. In today’s market, this is absolutely true.