Picture by Fastcompany.com
Steve Jobs and Richard Branson talk about joining the dots when they talk about innovation. The ‘What is Innovation” video is such a great explanation of seeing and connecting the dots relating to innovation from “Simply Explain”.
I often debate innovation with clients. What is it? How do you do it? How can we get better at it? and How can we make money from it?
Innovation is not about focusing on designing new systems, services or products. Firstly it is about looking at your dots and seeing how you can join them in such a way as to be able to create a unique service or product offering. Secondly it is about looking at your current or potential customers and joining their dots in such a way as to be able to create a unique service or product offering for them or their business.
BUT mostly it is about looking at your dots and those of your customer and joining them in such a way as to add unexpected value to your customer. If you get it right they will willingly pay you for that added value. Just look at how the teams at Apple and Virgin connected their dots resulting in innovations that their customers willingly paid them for.
The best definition I have found is that Innovation is ‘creating new value or capturing value in a new way’. It should be simple, practical and saleable delivering a positive effective change.
Earlier this year I discussed how to create innovations you can sell by thinking backwards. http://afrilean.com/think-backwards-to-create-innovations-you-can-sell/
I hope this helps you connect your dots.
Everyone talks about using INNOVATION to improve companies, products, and services to create a competitive advantage. But how do you innovate knowing that the end result is something your customer will value and is willing to pay more for?
Well the first obvious questions are what does your customer value and how do you innovate value? Many customers cannot find a product or service that meets 100% of their needs so they either develop their own solution or focus on ‘the closest fit’- a suite of products or services that best do the job. Their goal is to find a solution that is cost effective and hassle free.
So how do you find the perfect solution for your customers that offers them better innovative value? The answer is ‘think backwards’…look at your business or product service offer (PSO) from your customers point of view. It will both help you understand your customer better and drive customer centric thinking…the first step to creating a competitive advantage.
Value Innovation is the simultaneous pursuit of differentiation and low cost. There are two LEAN tools that when combined offer a great practical way to focus on developing your VALUE INNOVATION skills. They will also help you to create a new value curve, which not only creates differentiation but also new markets.
The first tool is Value Stream Mapping (VSM), which is designed to look at your business processes, from manufacturing to delivery, as a system and focus on creating flow by reducing waste. Remember that each step in the process has an impact on the other steps and the whole business process.
The second tool is Blue Ocean thinking (Kim & Mauborgne), which has a set of tools to interrogate value stream elements. These tools used with questioning techniques such as brainstorming and 5 Why’s drive innovative thinking.
The7 steps to create VALUE INNOVATION are:
- Create an INNOVATION team made up of a representative/s from manufacturing, distribution, administration and sales. Each team member should be chosen by the value they can add to the team. Each team member will be influenced by their own specific business environment and so create diversity when identifying and eliminating waste or interrogating elements.
- Invite one customer to each INNOVATION team meeting. This will allow them to get involved in designing a product or service that will add greater value to their business and reduce the ‘purchase hassle’. It will also add the consumer view point.
- Innovation teams must meet for 1 hour per week to discuss progress and improvement ideas.
- Draw up a flow diagram showing the process starting from when your customer receives the product or service and working backwards. The most effective method is to use post-it’s on a wall chart. Each post-it represents a step in the process and can be moved or eliminated as the new map takes shape. A powerful customer centric tool for creating and reviewing a flow diagram is the Blue Ocean Strategy Canvas. http://homebrewacademy.com/wp-content/uploads/yellow-tail-strategy.png
- Interrogate each of your products, services and business process steps using the Blue Ocean 4 Action Framework.
- ELIMINATE elements that are taken for granted and add no value.
- REDUCE elements that are higher than industry standards and/or exceed customer expectations.
- RAISE elements that are below industry standards and/or do not meet customer expectations.
- CREATE elements that the industry has never offered and/or is on a customer’s ‘wish list’. These elements must add value for the customer.
- Draw up an action list showing changes, actions required, person responsible and time lines. All goals set must be SMART and progress measured weekly.
- Once the new process is complete make sure it becomes the new best operating practice.
Remember INNOVATION is a process of continuous improvement. Good hunting.