Sustainable, continuous operational innovation at the HEART of your business…
Business innovation is a “hot topic” in the early months of 2016. Many references are made in how business innovation will assist your business to survive in the evolving competitive global business and technology landscape.
However, business innovation is often described as disruptive, technology, sales and marketing, product or service innovation. Many C-level executives and senior managers frequently discuss business innovation, but on many occasions there is no clear approach to initiate or embed business innovation in the wider organisation.
A first step to introduce business innovation is to clearly describe the various business innovation categories and create interest in and time to address what type of business innovation is most effective for your business. This allows businesses to start to think about where in the organisation they may want to apply more innovative thinking and execution. Only through this method it gives a focus to the business innovation discussions and helps to introduce innovation.
The following 4 high-level business innovations categories are often referred to:
Enterprise innovation is aimed to be transformational and is intended to disrupt the end-to-end organisation to be innovative. Enterprise Innovation allows the organisation to start with their innovation strategy, which assists to transition from its core business. Many Technology and Food & Beverage organisations have used this innovation type to completely change their core business and transition towards new markets with new products/ services.
Product/ service innovation is the most well-known and existing type of innovation. This type of innovation is available in most organisations and can be split into the following sub-innovation levels:
Disruptive product/ service innovation: a fully new product/ service is established in the organisation. This innovation type is fully embedded in most organisations through a new product/ service development (NPD or NSD) department. By continuously staying informed with the latest customer and market trends, businesses translate these requirements into new product or services.
Product/ service market innovation: this type of innovation uses a small product/ service adjustment (to an existing product), which will extend an existing product/ service to a new market or customer-group, e.g. adjusting yoghurt into drinking-yoghurt, which will allow ease-of-use for commuters, etc.
Product/ service extension innovation: hereby the product/ service will be extended with new functionalities or a line-extension will be created, e.g. The owner of the ice cream shop in town decides to change the recipe for her ice cream cakes, using more natural ingredients rather than artificial.
Sales & Marketing innovation focuses on introducing innovative sales & marketing methods, e.g. social media, alternative marketing channels, customer service adjustments and promotional changes to drive commercial growth.
Operational innovation tends to be focused on the enterprise-wide operations environment. This type of innovation often reviews the efficiency or effectiveness of its processes, technology and organisational model. This type of innovation may be conducted at all levels, and reviews the operational environment versus competition or best-in-class. The individual (mostly silo-based) departments have often, different levels of innovation. The operational innovation effectiveness is delivered by its collaborative innovation nature across the different operational elements of a business.
Each of the above innovation categories create it’s own kind of innovation challenges for possible innovation to occur. Most traditional businesses address externally facing innovation first, e.g. the product/ service or sales & marketing innovation. Businesses that have seen continuous financial downturns or see their customer market transitioning away from their core business have been known to address enterprise innovation. However, conducting enterprise innovation requires extensive board and C-level commitment and is often only used when there are substantial market trend movements, e.g. Tate & Lyle Plc, Amazon, etc. The first 3 innovation categories are often used by organisations that look for directly impacting their commercial targets.
However, many C-level and senior executives realise that innovation should be continuous and not only commercially focussed. This recent realisation has introduced a more extensive focus on creating innovative businesses. To deliver an innovative end-to-end organisation, a number of organisations have started to introduce sustainable operational innovation.
Unique Excellence has assisted many global and local businesses to introduce sustainable, continuous operational innovation. During my continuous thirst to collaborate with diverse workforces to deliver creative, open-minded result-oriented operational innovations, I would like to share the following insights to leaders that consider introducing operational innovation:
Select one sub-operational innovation element, e.g. supply chain, operations, finance (incl. treasury, tax, intercompany, etc.), human resources, legal, corporate communications. By selecting one of these sub-categories it allows the business to focus their attention on this one area (at least at first) to ensure high comfort levels without spreading execution resources too thinly,
Bring your (operational) employees on the innovation journey to increase engagement, innovation continuation and workable innovations,
Ensure that the innovation methodology allows structural forward action to be taken. Over the years, I have used Agile Innovation to deliver effective operational innovation. Through combining Agile Innovation with existing organisational methodologies, it allows your business to effectively introduce and extend operational innovation across your organisation
Continuously Educate, Validate and Innovate your solutions to optimise the effectiveness of your operational innovation and create a solid innovative basis for further innovation extension across your operational value-chain.
These four main suggestions have assisted many organisations to transition effectively towards innovative businesses and deliver continuous commercial growth. By bringing all your employees on the business innovation journey, I have seen externally facing innovation opportunities being created from within the organisation. Only by introducing continuous end-to-end operational innovation, business innovation will be at the HEART of your business…
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