July 2016 – Think of Whiting

Innovation stands out as being one of the most important factors driving the success or failure of business. The high level of importance for this factor has been evident over the past 20 years in particular. Of course, innovation has been part of commerce for centuries, possibly millennia. But never before has it been more broadly applied across so many types of businesses.

The Spread of Innovation

The spread of innovation today covers virtually every corner of commerce: communications, manufacturing, transportation, agriculture, medicine & healthcare, retail, consumer products, sports, and entertainment. Innovation has been easier to come by with advances in technology, particularly in computing power and engineering. Through the application of these technologies, it is possible to produce ever more innovative products and services.

Innovation is important in product and services marketing, both in Business-to-Business (B2B) and Business-to-Consumer (B2C) markets. Business people depend on the latest technologies to improve products and services, and add value to their offerings. Consumers buy innovative new products (like smartphones), and traditional products with innovative new features (like cars that park themselves). Consumers use services that save them time and money, and make their lives easier. Innovation is at the core of these new services.

Innovation an Element of Productivity

Innovation in manufacturing and services often leads to increased productivity. Boosting productivity, doing more with less, yields a return on investment for both the producer and the buyer. Companies and the economy can therefore expand at a faster rate than would be possible without innovation-inducing productivity.

Innovation in productivity and in features, is also being driven by competition from low-wage economies. In both products and services, if there is no differentiation by innovation, then the low-cost provider wins.

Innovation in Steps and in Bounds

Innovation can occur in small, incremental steps, and also in great leaps. Products and services that are already proven successes usually benefit from the smaller steps.

There are now many cases where giant leaps forward have occurred through innovation. Recent examples include cloud computing, social media, smartphone apps, etc. The leaps that occur usually render great benefits upon the innovators and the customers, be they businesses or consumers.

The Downside of Innovation

Unfortunately, some innovations in business economics incommensurately reward scale and power. Examples include Concentrated Animal Feeding Operations (CAFO) monoculture agriculture, and the financial tomfoolery of 2008. Innovation has made lowering costs through scale much easier, which has led to concentrations of market share. Bigger has been better. You name the industry and that has been the case. Unfortunately, the hidden costs, often called externalities, that result from scale are rarely accounted for.

The downside of this trend toward bigness can be seen all around: the concepts of “too big to fail”, excessive off-shoring of production to countries with lower costs and poor human rights, reduced competition due to mergers (resulting in smaller pools of management talent and less risk-taking), insular management, and greater reliance on non-renewable energy in production and transportation. Of course, innovation is not the cause of these ills, but it is a facilitator. It speeds up the process of both good and bad effects.

The Future of Innovation

Innovation can also be used to reverse the trend toward “bigger is better”. Smaller is nimbler. When smaller enterprise proliferates, smaller also has the advantage of more minds in management positions working to solve problems, taking risks, and making a bigger economic pie.

A reversal from “bigger is better” can also take place through heavy-handed government action, of course. However, reducing or eliminating tax loopholes and subsidies for established businesses, and recognizing and pricing externalities (such as with a carbon tax) are market-based and inherently fairer. When the system is fairer, there is less reason for individuals or businesses to try to game the system.

Being Mindful and Acting on Innovation

An organization that has a culture of innovation is one that consciously supports risk-taking. Human resources must be mindful of the importance of risk-taking, and hire employees who are willing to take prudent risks. When a company actively seeks out innovation from it’s employees, then innovation is much more likely to take place. On the other hand, if a corporation’s management is insular, and primarily trying to please its board through the management of quarterly expectations, then it is much less likely to be innovative.

Any organization seeking to be more innovative might consider the taking on the following as creed: frequently think about what can be done to make the product or service better. As a group, agree on it, write it down and commit to act. The results will likely make the effort worthwhile.

The Case Study – An Effective Communication Tool

A case study is one of the most effective communications tools available. Case studies work because they tell a story that people can relate to and learn from. People like to see how a product or service is used by others. A case study is often a good way to show that.

A case study can be written to lead the reader (or listener) on a narrative, guiding the reader to specific objectives, such as to fill out a form, take a survey, attend a webinar, etc.

Communications Objectives – Education and Raising Comfort Level

Companies need to communicate with lots of different people: potential customers, customers, their own sales people, their development teams, their investors, influencers, and others. The communication objectives often have several things in common. Educating readers about some topic is a common objective. Case study narratives can be very good at achieving this objective with these diverse audiences.

Even if the readers are generally familiar with the topic of the case study, a case study can still be used to raise the reader’s comfort level with the product or service. This is an important objective, not necessarily for the earliest adopters, but for those coming later. Developing a comfort level can be a critical factor for many people, whether they be buyers, influencers, or for those selling to others. Increasing the reader’s comfort level can allay fears of failure that hold people back from making a purchase.

Using Early Adopters as Case Study Subjects

Early adopters are people who buy a product or service when it is first introduced. Often, early adopters are loyal customers who trust the company, and the promised value of the new product or service. Whatever the case may be, early adopters can be the best subjects for a case study.

People relate to the stories of others. When a narrative reveals a person making a decision that shows intelligence and leadership, readers are more likely to follow suit. The challenges faced by the early adopter, and the rewards and successes to the adopter by making a good decision can be inspiring.

The reader may develop an affinity for the product or service by recognizing similar challenges faced by the adopter in the narrative. The affinity grows stronger when the case study shows how the subject of the narrative successfully overcomes those challenges. The experience of the early adopters can become a template for the approach of the reader toward the product, service or solution.

Two-way Learning from Case Studies

A surprising benefit of writing a case study is that there is often two-way learning happening. Writing a case study is a process of learning about the customer, and interviewing that customer about his or her challenges, failures, and successes. The study process helps the writer understand the customer better. Just from going through the process itself, valuable realizations and insights can occur.

That two-way learning should factor in when weighing the costs and benefits of the case study. That two-way learning can be hard to measure, but is unquestionably beneficial. You can start by asking yourself if you’ve learned anything from your completed case studies. Then ask your salespeople, marketers, customer-service representatives, and others if they gain value and insight from the case studies. If the internal benefits are great enough, the case study can be entirely justified from that back-flow of knowledge.

Month: July 2016

Innovation: a Key to Business Success