But beware new product development. This is slow, costly and largely incremental. Research shows that most innovation is still focused on the hard stuff. Despite our calls for customer-centricity, it usually results in a new product. Innovation applied to other areas, particularly applying the digital benefits of networks and interactivity, can have far more impact at a fraction of the cost. The top areas for ROI on innovation are:
• Rethinking brands – rethink the ambition of your brand – how can it make life better, how can it engage people - through sharing a richer, more relevant purpose. Brands are about consumer dreams not the products you sell.
• Market strategies – the world is your oyster, your challenge is to focus on the best opportunities for you – sectors and categories, geographies and segments – think about this before you even contemplate your market ”ing” strategy.
• Business model innovation – redesigning your revenue streams, costs and capabilities, and transaction models - like Amazon and Google did, and now Threadless to Zipcars and thereby creating the most engaging clothing and revolutionising car hire.
• Customer experience – innovative channels, service and retail theatre, learning from Dell to Pret, or more recently Aberchrombie to Zappos, recognising that buying is more emotional than a click. And then enabling people to do more with what they buy.
• Supply networks – more virtual supply networks, fast and responsive, sharing costs and risks, collaborating with new brand partners, enabled by the likes of Alibaba which is the eBay of suppliers, and Li & Fung now responsible for 40% of the world’s clothing.
• Fast and frugal – ultimately, it’s about action – doing the right thing, doing it faster, and often doing it cheaper. That doesn’t mean slash your budgets, but think smarter and differently about how to do it... just like every one of today’s new market leaders.
Digital technologies are at the heart of these innovations, but not simply as a physical extension or virtual pure play – instead it’s about a fundamental integration of how businesses work. And that starts with an inspiring purpose – how do we make life better for people, in some way – and then cascades through to value propositions and experiences, to products and services, operational structures and partnerships, and the bottom line.
Alibaba, Amazon, Ashmei... Zidisha, Zipcars, Zilok... these are true hybrid business (physical but digital, digital but physical), driving business innovation (innovative products, services, business models, experiences, channels, sales, pricing, communication, and much more) and driven by the vision, insight and determination of their people.
Of course many business innovators, from Jeff Bezos to Meg Whitman, Ratan Tata to Lei Jun, have succeeded with a marketing mindset, it requires marketers to fill the role, particularly in organisations led by people with financial or operational backgrounds.
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