The following blog is made up of the best bits of editorial, articles and blogs that I’ve come across in my 38 years of working life, 30 of which I spent as my own boss at a very successful Creative Agency.
I thank all those that have inspired me to make (and write!) my own observations on these subjects. I now want to switch my focus to helping the next generation find the success that I did, and hopefully avoid a few of the pitfalls I didn’t!
Innovation happens slowly. Most engineers will overestimate the speed of progress over the next few years, and dramatically underestimate how much will be achieved over the next decade. Why?
Let’s take an example. If change happens at a relatively slow rate of 5%, and a compound effect change is taken into account for the next couple of years, we’re looking at a rate of between 10 and 15%. Examining this over the next decade, however, and it’s a different story. We’d be dealing with upwards of 65% as a rate of innovation.
A car purchased 10 years ago will have fewer safety features than one bought today, and will be significantly less economical too. Technologically, it’ll be unrecognisable by comparison.
Securing innovation right at the core of your business is vital to being able to survive and thrive. There are three steps to making this happen:
STEP ONE: Look at your business data.
Customer purchases, repeats and confidence. What do they all tell you? What’s happened? Some might see this as market research, but it’s not. It’s a historical view of what worked and didn’t work in the past.
This is an essential first stage of the process.
STEP TWO: Look for the trends.
Analyse each facet of your business using this data, and take note of what is going up and what’s on the way down, in whichever way works best for you. An effective technique would be to score each out of 10, 10 being for a strong trend with a great future and 1 for anything on its last legs.
There are countless examples here. Take one of the most innovative pharmaceutical companies in the world, with 30% of its products being newly developed every three years. They look at the 8-10 scored trends, using the scale above, and develop new products aimed at these trends before they become mainstream.
This secures an advantage for the product in terms of price and attractiveness as they reach the market first. These are markets mostly aimed at first-world countries that can afford the prices for products offering such innovative qualities.
The products that score lower do so because they’ve been around for a long time. Competitors have caught up and are able to challenge these products on both price and quality. The scoring system has here allowed the company to recognise that further development of these products is redundant.
STEP THREE: Ground-breaking innovation.
In this stage your focus has to be on the weaker areas in the marketplace, and on where the world will be in three to five or more years’ time. This is anticipation and is easier to achieve than you might think.
Often innovation is linked to what others are doing. Take, for example, electric cars. These are nothing new. In fact they precede the internal combustion engine, which has stayed at the top of the tree for a century. We can anticipate that this is about to change, however, with the traditional engine set to be knocked off its perch.
Softer signals have already been apparent. Among other similar incidents, the VW scandal involved trying to fix emission data, with diesels causing pollution on a invisible yet monumental scale having created a disillusionment within the marketplace.
However, for this innovation and progress to come about, battery technology had to improve, and it did.
Now, it’s moving to become mainstream and will accelerate as car manufacturers state their claim to the new territory. Tesla has moved fast and are very much in pole position, whilst all others are now following. Perhaps we’ll see an Apple or Google ‘car’ in five years’ time.
To aid this innovation, however, the Government will need to ensure that charging points are as widespread as petrol stations. This is no ‘quick fix’ and could turn into what is essentially a catch-up job when we consider the sheer pace of the progress in the electric car industry.
The innovation model explored here offers a fruitful alternative to R&D, and can be applied to any business in any industry. The change required is only a small one, and is one of mindset.
Often, it is those on the outside of your business who can spot the trends and areas crying out for change which originate from the inside.