In this article, you will discover that innovation can be done without risk in many ways, at very affordable costs and for incomparable profits!
Companies at risk for lack of innovation
55,000 failing companies in 2017, a questionable figure. Even if the causes are complex and multiple, a constant emerges from this chaos: the majority of these companies suffered froma deficit of innovations capable of establishing or restoring sustainable growth.
When I ask entrepreneurs or leaders about the ultimate goal of their business, I always get the same answer:
– Earn money of course!
It’s well known, the purpose of a business is to ” earn money “ !
This fact, however, obscures a fundamental truth that “Old Sea Wolves” have understood over time by learning to stay afloat when the breaking waves threaten to engulf their ship during the worst of the storm: The goal of a business is NOT to make money!
Seen from afar, the difference does not seem that great, but on closer inspection, it is huge and fundamental!
In fact, it is at the level of strategies that all the difference will be. The choices will no longer be the same and neither will the procedures!
The innovation term “Disruptive” is opposed to incremental innovation, that is to say, innovation which aims only at updating an existing product or service. The goal is too often to give it a look of novelty that it does not really have. It’s the old idea to make new with old.
“Disruptive or disruptive innovations, which are a very small minority in companies’ innovation efforts, nevertheless generate much larger profits than those generated by incremental innovations. ”
It is true that the latter remain essential to extend the lifespan of existing products and services while preserving an assured flow of income. But they are far from sufficient to guarantee the success of a business over the long term!
“Only disruptive innovations can stand the test of time!” “
All companies will have to use breakthrough innovation at some point in their history if their leaders want to put their company in growing prosperity thereby assuring it of a long-term future.
History is replete with examples of leaders who have not believed in emerging breakthrough innovations. It was Kodak who did not believe in digital photography … or La Redoute who did not believe in the Internet even though it has a first-rate logistics platform and an enviable national popularity!
The reality is that most companies fail to generate a sufficient pace of innovation. This is all the more true for firms born before the digital age.
Many businesses are entangled in conventional schemes, trapped in devices and procedures sometimes established over half a century ago. As proof, it suffices to note their insufficient organic growth.
However, organic growth is intimately linked to … disruptive innovation!
Stand out your brand
Conversely, some players have understood before everyone else the incomparable advantages of novelty which stimulates the curiosity. Two of the most powerful levers in the world to attract customers!
What will relegate others to the background and which is the ultimate strategy is, and will remain for a long time, the fact of ” stand out By providing a new kind of customer experience.
Star actors have done it in their own way: Amazon, Private Sale, Nespresso, Renault / Dacia, Apple … Why not you?
Do it … but do it differently
A good strategy of seduction is to suggest something of concrete. But what will make you magnetic is to “Propose something … really new!” “.
Human beings are so made that they cannot resist trying something that will stimulate their five senses and ideally induce feelings of pleasure, or even emotions ! And not just the new model of a “trick” that we already know … (incremental innovation).
What people love, and that adds to the strength of novelty, it’s’try something for the first time!
Nothing in the world can generate organic (natural) growth like something new. – —- Nothing to do, we have to go see!
Why are we attracted to novelty?
Because it breaks the routine? Because it breaks boredom? No doubt, but above all because novelty activates brain function. Neurobiologists have recently discovered that the brain’s area of memory is also a detector of novelty and that a new context reinforces memory capacity. In the presence of something new, the activity of certain brain areas increases, but all the information seems to be treated with more intensity. Every change, all unexpected renews interest and promotes memorization. However, some people do not like change. For them, it is associated with the unknown, with risk; it destabilizes. When any innovation worries, we take refuge in the routine, which erodes interest in others and things. Paradox: the stability reassures, but the novelty attracts. [Source:[Source:pourlascience.fr]
Disruptive innovation in all its forms
There are many ways to innovate without going through technological marvels, taking risks and taking huge investments.
Apart from technological advances, innovation can come from many other sources, concepts and new business models … So many new ways to see the world.
It is in particular with marketing that the possibilities for exploring unknown paths, endless openings, creations, breakthrough strategies, are most emerging.
Innovation conditions the lives of businesses and ensures their long-term prosperity. At least for a reason: Growth depends on It!
A misconception about innovation
A misconception about innovation and which is undoubtedly at the origin of the innovation deficit in all sectors – with the exception of industries linked to new technologies – is that disruptive innovations require colossal investments with a department Ruinous R&D.
This is indeed the case if you have in mind to manufacture the next rocket destined for the planet Mars! But is this really your goal?
For all intents and purposes, I would just remind you that originally Facebook ($ 400 billion in 2017) was scheduled overnight by one person!
- No R&D department;
- No business plan;
- No fundraising;
- No marketing;
- No advertising ;
- No hiring.
All of this happened naturally and organically as the Menlo Park firm developed.
I can already hear what you are saying to yourself “Yes, but we are not Facebook! “. I can hear you well. It was just a matter of showing that the innovation of the century (or one of them) had not cost a single dollar at the beginning.
And even if you don’t have a penny, you can still make your servers with Lego blocks! Isn’t that what a little unknown startup called “Google” did in its early days?
A toxic myth: innovation = risk
A myth firmly rooted in the collective unconscious is that innovation is synonymous with “Risk”!
In reality, the risk always comes from the blindness and stubbornness of people. The fault is found concretely in the value proposition hypothesis and in the growth hypothesis that we strive to demonstrate … although they prove to be simply false!
It is clear that innovation itself has nothing to do with this matter. It is the way of operating that has been based on simple assumptions that have become the basic assumptions of society, while floating in a fog of total uncertainty in reality.
How to transform these hypotheses into certainties?
The answer is simple: by testing them thoroughly to learn how to create a consistency that I call italignment between product/service and customers/ Users.
For “Test, measure and learn”, we will need an effective and appropriate methodology: this is the analytical management of innovation. It allows companies to objectively prove that they are “d”learn to grow over the long term! “
In many situations, I have seen leaders move forward or dive in blind simply for the reason that they did not have than standard indicators measuring the raw figures (number of new customers and sales figure).
You need decision indicators which clearly give the figures which concern actual behaviors clients who are sometimes clients… without being users, for example! (bad sign for growth…).
Specific management to remove uncertainty
In this regard, the analytical management of innovation as described by Eric Ries, is able to offer a scientific method which considerably reduces the risks when it is correctly implemented and well interpreted.
It all starts with ” convert fundamental assumptions in quantitative financial models ”.
Without going into details, it is a continuous improvement and learning method thanks to multiple experiments in real situations (facing customers) from a minimum-viable-product according to the feedback loop: “Produce – Measure – Learn”.
You could say that with this way of doing things, you no longer throw dice at random, but you create a feedback loop for validate lessons provided by successive experiments.
The first hypothesis to validate is the value proposition. Basically,
- Do people buy the product? and especially :
- Why do people buy the product?
- Do they really use the product?
- And how do they use it? What features are really appreciated and really used?
You will have to continue by validating very quickly the growth hypothesis by analyzing the figures obtained by measuring:
- The profitability of each client;
- The cost of acquiring new customers;
- The purchase renewal rate (depending on the product) and / or;
- The rate of product recommendation by customers themselves.
Then comes the time to know if it is necessary persist or if necessary swing in cases where the fundamental assumptions prove to be inaccurate.
You don’t have to reinvent the wheel
Another limiting belief is blocking the road to innovation: many leaders / business leaders imagine disruptive innovation as a major technological advance in their field. Hence this idea of very expensive R&D departments.
Innovation is seen as a performance factor for 81% companies in England Disruptive innovation is a new vision of the company whose very basis is “other”.
- Imagine a vision that opens up to other possibilities;
- Discover new strategies that are truly profitable;
- Get ahead, do what others don’t do!
At the time of a major change that is both necessary and fraught with uncertainty, you need reliable information and a range of excellence strategies selected by a specialist.
Disruptive innovation may well be the best strategy for boosting your business growth or keeping it at its best.
For the record and as an example, Apple has just lost $ 100 billion or 10% of its market capitalization, for having “forgotten” that its customers were waiting for an iPhone X full of disruptive innovations! But the only real disruption of this Smartphone is the astronomical price of € 1,650 for the XS Max version !!!
To innovate is to attract attention, renew interest and stimulate curiosity. Our brain is thirsty for novelty and novelty. Going forward, stimulating the senses to create new experiences by arousing emotion is THE winning cocktail! Tchin!