Faster, easier innovation that won’t piss off your customers

When I say “innovation”, what do you think of?

Chances are, you think of innovation in your products and services; you may think of blue widgets instead of the normal red ones, or you might think of a way to deliver faster, cheaper service. In the early days of the automobile, other manufacturers provided cars in other colors, innovating beyond Ford’s “any color as long as it was black”. Southwest Airlines provided faster, cheaper service at regional, non-core airports, innovating beyond the other mammoth airlines and their bloated operations.

Books like Blue Ocean Strategy (one of my favorites!) supports this idea of product- or service-specific innovation. However, your products and services aren’t the only place where innovation can happen.

Innovation can happen in your processes, too.

Your processes are the functions and actions required to operate your business but which aren’t necessarily tied to a specific product or service. Examples include:

  • Accounting activities
  • Order-fulfillment and distribution activities
  • Sales funnel activities

A great example of this kind of innovation is Amazon. They didn’t invent or really innovate books (well, until they came out with the Kindle) but they did innovate their sales funnel and order-fulfillment.

Process innovation is better than product or service innovation anyway:

  • Process innovation is harder for competitors to quickly discern and copy
  • Process innovation doesn’t alienate customers as much as a change in products or services would
  • Process innovation can have an immediate, positive impact on financials with some expenditure but without the same related tooling, inventory, or marketing costs

The only drawback (if you want to call it a drawback) is that you don’t end up with whiz-bang products and services because of it and you can’t always promote your innovation to customers. (“Buy from us. We have the most amazingly innovative accounting processes!”)

So you’ll still want to push for product or service innovation to stay ahead of competitors. But you’ll want to continue process innovation to turn your business into a finely-tuned machine.

Here’s what to do:

  1. List the steps in your process. For example, your sales funnel might be: lead, prospect, customer, etc. Or, your accounting process might be: gather data, sort, input, submit to the accountant.
  2. Identify the specific actions you take at each stage. Write down all of the distinct, discrete actions. For example, you might have an action in your sales funnel where you capture an email address. Or you might have an action in your accounting process where you put your documents into a box to bring over to the accountant’s office.
  3. Treat each stage and each action like a specific sub-process that can be modified.
  4. Apply some of the well-known innovation-creating tools. Start with a SWOT analysis then try Kim and Mauborgne’s Four Actions Framework.

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