10 Things to Think about before you try to Innovate
What is Innovation? Does a new idea qualify as an innovation? Not in my mind. Does in it quality as innovation in your customer’s mind? Not if it does not create economic value for your business or your customers. An idea might be creativity but the rubber hits the road when you make real changes to the value chain that creates economic value for your customers and your business. We shared more about how to use upfront thinking and strategic tools and proven idea-to-innovation processes to innovate and create real economic value for you and your packaged goods customers at the Flexible Packaging & Label Makers Association – Changing the Landscape – Conference on 10th & 11th November 2016.
For a link or reference to that keynote presentation go to:
Many people confuse creativity and the generation of ideas for innovation which is economic value creation. There are many great examples of innovation in the marketplace we can all point our fingers at and they each hold one commonality – they create value in the eyes of the end customer who pays money for the innovative good or service. These innovations remove cost in the value chain from inputs to end user or create value in the value chain generating an improved product or service that a customer is willing to pay a premium for due to a higher perceived value offering.
Many people in the consumer packaged goods and packaging industry get bogged down in the gross misunderstanding that innovation is all about new products and fancy packaging – wrong again! The lowest return on investment for your innovation effort is Product Performance (new or existing) and yet an alarming 90% of innovation effort is focused on this one of ten types of Innovation (Keeley, et al, 2013). Innovation is a discipline, not a creative activity. Dreaming up new products or features, in isolation, “provides the lowest return on investment and the least competitive advantage” (Keely, 2015). Why? Simply because the easiest thing to copy is a product – new or existing! Think about the health of the Australian Flexible Packaging & Label Industry today? Who is your greatest threat to your own competitive advantage? Is it lower cost flexible packaging and label manufacturers in Asia? Are they capable of copying your new packaging innovation? Yes! To make a truly transformational and sustainable innovation that creates value not only for you and your business but your customers you need to innovate across multiple types of innovation.
Only through strategic upfront thinking and use of a disciplined idea-to-innovation process like Stage-Gate® or Lean® and through Agile® planning and project management processes can you begin to start directing your scarce resources – $/people/time in the right direction. How can you innovate in the right direction if you have not taken aim at what you are trying to achieve? You might choose to disrupt the incumbents in your industry but how to do that will rest on a deep understanding of your customers, based on deep insights into what they value today and what you perceive they will value tomorrow. They can’t tell you what they will value tomorrow because they don’t know the future. Neither do you! If Henry Ford had asked people in the early 1900s what they wanted in the way of improved transport options they would have replied “a faster horse!”.
You will still find there is a lot of aim, fire and adjust going on as you pivot and turn and kill off small bests and invest in bigger bets that are taking your business in the right direction. Where is that direction? What data sources big and small, quantitative and qualitative do you have to start to build a better tomorrow picture for you to take your fast, agile, lean and innovative company. Be sure when you are out and about spending valuable time with your customers you are tuning into their problems, NOT yours! Try to take a step back before you try and sell them your latest greatest flexible packaging or shiny new label that in all reality they probably don’t need or want. Start with a simple question next time you face your customers – old and new and prospects, and dig deep from there. What is keeping you awake at night? What is your biggest headache or problem in your business right now? Start wide and only then narrow in on their packaging and labelling issues. You may well uncover an insight or see or hear an opportunity to innovate far beyond a new product or packaging type to one or two or three or four or five different types of innovation that can help you transform your business and your customers. Once you have more than 4 types of innovation in your new to market launch you are already differentiating yourself from the pack – pardon the pun! Get up over 5 to 6 or 7 and you will truly transform and disrupt your industry and create a sustainable (profitable) competitive advantage for your business.
Do not underestimate the amount of effort, upfront thinking and discipline that is required to make this happen. If Innovation was easy everyone would be doing it wouldn’t they? Clearly they are not. 90% of innovation effort is still focused on the easiest to copy “Product Performance” type. Step outside the pack – think outside the box and start innovating on the other 9 types of innovation.
The article above was published in FLEXO November 2016 Issue: p.6 ahead of the Flexible Packaging & Label Makers Association – Changing the Landscape – Conference on 10th & 11th November 2016.
Dermott Dowling is Managing Director @Creatovate, Innovation & International Business consultancy. Creatovate help businesses create, innovate and growth through innovation and international business development.
If you are interested to get Dermott to talk to your team, business or conference about creating value for consumers and customers in consumer packaged goods you might like to reach out to him for a chat over a cup of well brewed coffee. Contact email@example.com or jump onto the Creatovate website and complete the contact form so we understand your needs and can tailor a bespoke consultancy solution to your challenge.
Bibliography & References:
Larry Keeley, Ryan Pikkel, Brian Quinn & Helen Waters (2013) Ten Types of Innovation – The Discipline of Building Breakthroughs John Wiley & Sons, Inc., Hoboken, New Jersey.
http://blog.deloitte.com.au/strategy/not-all-innovation-is-equal/#.V_cPZOB96M8 viewed on 7/10/2016
https://hbr.org/2011/08/henry-ford-never-said-the-fast viewed on 7/10/2016