innovation is no just…

THINK MORE BROADLY – 3 OBSERVATIONS

I have already commented on the tendency for business to think of innovation, and in particular disruption, as being about technology. There is a lot written about digital disruption and technological innovation when, in fact, much of the more successful innovation over recent years has not been digital and much of the innovation has not involved technology.

Some of the most successful innovation has involved new business models utilising existing technology.

There has also been a tendency for discussion on innovation to focus on:

  • Consumer products such as mobile phones
  • Business to consumer marketing e.g. Airbnb
  • Innovation by multinationals such as Tesla
  • The product per se, as opposed to processes and functions

I would argue that innovation needs to be approached with a much broader scope than this. I would further argue that:

  • Innovation is every bit as important to services as it is to products – an opportunity apparently lost on most professional service firms such as accountants and lawyers.
  • Innovation is every bit as applicable to business to business marketing – an opportunity also lost on professional service firms and many others including – advertising agencies.
  • Innovation is every bit as relevant to local businesses as it is to large businesses, and is very often the key to becoming large. Consider retailers who rarely look at innovation.
  • Innovation needs to be applied, not just to the product itself, but also to the processes and functions within an organisation including distribution, marketing and pricing.

I would argue that innovation needs to be considered in the widest possible context. Opportunities for innovation, driven by input from the primary target market, can be found in most businesses and in most areas of those businesses.

I would argue that there are significant opportunities for (highly conservative) professional service firms in particular, to innovate, and do so in a way that creates and drives a sustainable competitive advantage. Indeed, I challenge readers to identify a significant innovation by a professional service firm in Australia in the last 10 years. Anyone who sites the broadening of the range of services offered by the large accounting firms does not understand innovation.

I would argue that there are significant opportunities for innovation in services in general. We see so little innovation in the services and in particular B2B services. Again, I would challenge readers to identify many examples of B2B innovation over recent years.

We see so little innovation by small businesses (with the exception of start-ups). Many seem to labour under the misapprehension that innovation is for international businesses or start-ups. They fail to recognise that it is innovation that made many businesses large rather than large businesses being the only ones that can afford to innovate. Innovation does come at a cost but it can also reduce marketing costs (establishing a competitive advantage) and drive revenue.

Innovative marketing is of particular interest to me. While some will argue that the use of online channels and digital tools is innovative, I would argue that this is about the extent of marketing innovation over recent years. Business is, for example, still far too reliant on advertising.

Innovation needs to be viewed more broadly, and the opportunities for innovation reach far beyond the obvious. The fact that Airbnb and Uber could pop up out of nowhere, become as successful as they are, as fast as they have, and the relevant industries were unprepared, is evidence enough of this!

TRUST ME

  1. Innovation is not just about goods – there is a real opportunity to apply it to services.
  2. Innovation is not just about B2C – there are significant opportunities in B2B.
  3. Opportunities for innovation can be found throughout all businesses – big and small.
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