Where To Look For Innovation
Not going digital is dangerous. Not going digital can mean you will no longer be in business. There are numerous examples of just this - for companies like Kodak, Blockbuster and Blackberry.
Being too late on the digital innovation wagon meant they were utterly beaten on the market by their competitors. Some have even had to close their doors forever. Just like Kodak was destroyed by Instagram and Blockbuster was beaten by Netflix, you too could lose to your competition.
And going digital is not just a matter of survival, it is also a great way to succeed. MIT Sloan school found that companies that are adapting to a digital world are 26% more profitable than their industry peers. This is not a percentage that can be easily ignored by any manager.
The first step on this journey is innovation. Unlocking innovation can be difficult, particularly, if your company is not inherently innovative. But you can look for sources of inspiration in familiar places, you just need to look at them from a fresh perspective. For example, customer experience is something you have always tried to improve and now you can look for ways to add a digital component. An example is Daimler Trucks North America which offers a service in which a truck communicates with the service center and provides them with the information they need to analyze possible faults and inform the driver about what to do.
I have written extensively about how to improve your products by adding internet of things features, such as sensors and communication capabilities. Collaborative innovation is also an excellent source of innovative ideas. Amazon, PayPal, Apple and Microsoft are companies that partner with providers of complementary products to extend their reach. For example, we are developing our software for Apple and Android platforms to reach a wider audience than ever before. We are competitors, but also partners.
Also, innovation needs to be practical. Instead of thinking in terms of needing to buy something, look at your existing resources to see what you do to move forward on the journey of digital transformation. We recommend our customers to begin with the end in sight - to plan out their final destination exactly. It is usually a much faster and more cost effective way than changing directions mid-project.
Also, when you are looking for innovation, focus on the gaps in the market. Look at your products and services and the services and products of your competitors and consider if you can offer the market something new. For example, in the USA, there is a company that only offers loans for weddings and related activities. It was something that other banks preferred not to do, because it was considered too high risk. This niche was exploited and the company's growth is stellar.
And one last thing - look at your existing resources. It could be you're not utilizing them. For example, gyms in schools and similar venues have realized they can rent out their sport facilities after school and generate revenue. Without incurring significant costs, they have leveraged their existing resources. And with digital technologies, things like this are easier to do than ever. So look for new revenue streams without adding cost.