A Case for Business Innovation Strategy
What is a business innovation strategy?
Innovation strategies are used by organisations to plan the growth of their market share or profits through product and service development. In order for an innovation strategy to be successfully implemented, organisations must be able to: inspire, analyse, collaborate, take risks and accept change. After all, business innovation comes from pushing the boundaries of existing infrastructure, policy and technology.
Whilst it now seems obvious that everyone should have a business innovation strategy this hasn’t always been the case.
A prime example of the failure to innovate is of course Blockbuster. The mega-retail-giant died out in no time because they failed to incorporate a successful innovation strategy, not because they didn’t have a big enough marketing budget or had a poor employee work ethic.
Failure to adapt
Having a business innovation strategy involves planning the way that a business interacts and grows within its own market, as well as others.
Blockbuster had successfully solved a very prominent issue within the entertainment industry at the time, which was that the cost of buying DVDs and videotapes was expensive.
Providing a simple, readily available entertainment service which enabled customers to rent a video or DVD at a fraction of the price of buying a film, saw Blockbuster make millions.
This rental idea was innovative for its time, and Blockbuster was making plenty of money so they saw no reason to doubt their success or change the way they were doing things. So much so, that in 2000, when Reed Hastings, a founder of a small company called Netflix travelled to Dallas to propose a partnership with Blockbuster’s CEO, John Antioco - they saw no need to invest in his idea. An idea whereby Antioco would promote Netflix’s online service in its high street retail space to increase sales in the growing digital entertainment market.
Hastings was laughed out of the room.
The irony of this is that Netflix is now worth $122 billion, and all that is left of Blockbuster is a, one-page website promoting their on-demand TV service.
Blockbuster is a familiar example of a fortune-500 company that was driven into the ground because it failed to realise the importance of adapting to a changing market.
Hastings knew that there would be a demand for a service whereby consumers wouldn’t even need to leave their homes to watch the latest ‘blockbuster’ at a fraction of the price of buying a DVD or video tape.
Now, Netflix has grown and continues to develop its portfolio of achievements. They’re also working in partnership with some of the world biggest production studios to produce the content that their consumers want to watch.
All of this combined, means that they’re able to consistently see their consumers paying-up for the service.
Hastings took the risk of building a revolutionary service, that others thought would fail, as a result his company continues to succeed in leaps and bounds.
Recognising the importance of Business Innovation
Howard Schultz, CEO of Starbucks decided that the renowned cafe chain had lost its mojo and flew in every store manager from around to world to help redesign it’s cafe experience in order to suit a new-age of consumers.
Schultz made this decision to work in unison with his employees, to achieve an effective plan as to how Starbucks was going to continue to grow in an evolving and increasingly competitive market.
He lead by example, showing how important business development and innovation was to him by bringing his team together for this immense meeting. Despite the cost, he believed it was integral to the success of the brand. In doing so he set in motion the ideas that would see Starbucks grow and succeed in its coming years.
Thinking like a designer
A large part of any designer’s job role involves thinking about customer problems and building solutions. When these solutions out-stretch the bounds of existing technology they become innovations that change the space of the market.
Another example of a company that excels at business innovation is of course, Apple.
A large portion of Apple’s success comes from their commitment to making a positive impact on its consumers at any cost possible. “We pick the projects where we feel like we can make a difference- the big customer-impacting features” says Anand Shimpi, Chief of Hardware and Technology at Apple.
Even during its early days, Steve Jobs was committed to creating products that looked great, functioned as intended and solved real customer issues.
One of the biggest things that Jobs did well and propelled the company forward, can be seen in how he encouraged his team to constantly revisit the design and manufacturing processes of its products.
Jobs once reportedly threw the first prototype of the Apple Ipod in an aquarium to prove a point. Jobs had consistently stressed to Apple’s design and engineering team about the importance of the device being small and lightweight.
After being handed the device, Jobs weighed it in his hand, stood up and walked across the room to a small fish tank and dropped the prototype in the water.
After the device touched the bottom, bubbles floated to the top of the tank. Jobs turned to the room and said “Those are air bubbles, that means there’s space in there. Make it smaller.”
It’s a lesson that has stuck with Apple’s engineers, but it also highlights the importance of constantly pushing the boundaries of the market.
Making and Breaking
Taking risks, adapting to change and pushing the boundaries of technology are all important steps to ensuring that a business is always improving and developing both in terms of its market share and its consumer commitment.
Countless world-renowned CEO’s are known for making big decisions and breaking the rules. This is what sees successful companies become innovative organisations with a passion for developmental culture.