Businesses often
struggle with how they can innovate. For most companies, the process of
creating a new product or service is often reactionary: someone else does
it, we copy. Businesses are as bad as people at "keeping up with the
Jones's." In reality, the business who proactively creates new
products and services is the company who defines the market. And, in
technology, the company who gets there first is often the one who wins (there
are also issues of cost control efficiency, best price, best quality that can
determine market niche success).
You may ask, "Is
there a blueprint to creating new products?"
AspireNow's Business
Aspiration has built a formula for new products and services that we implemented
to simplify this process and ensure we are a proactive and innovative company in
our marketplace.
The four keys to
innovate and create new products and services are what we call NICE (New,
Improve, Consolidate, Extension):
NEW - what is not being
done now by anyone else?
IMPROVE - What IS being done
now, but could be improved or replaced?
CONSOLIDATE - What is available now
in multiple groups/products/services that could be consolidated?
EXTENSION - What current
process/product in a different industry could be extended or applied to our
business to create a unique new process/product/service here?
Let's take a closer look
at N-I-C-E:
1. NEW
- what is not
being done now by anyone else?
The answers to this
question build innovation - an entirely new process, service, or product nobody
has thought of before. Or, perhaps someone thought of it, but it has not
been produced where the masses of consumers may access it. We need
research and development to turn ideas into reality. But where do we get
the ideas from? Our own brains. That's right. #1 cannot be
fulfilled by looking at other companies in our industry (we'll address that
method of innovation appropriately under #4).
So, how do we access our
own creativity? Many companies huddle people together into think
tanks. Personally, I am not a believer in creative think-tanks. They
don't work very well. Think about it, put yourself in a conference room
with ten other business people and see how many new and original ideas you come
up with before people just start throwing out rehashed ideas to have
"anything" that sounds like a contribution. It's mostly a waste
of time. I'd rather gather people together AFTER they've gone off and done
individual creative work. If you don't believe me, give 5 different groups
of people the same assignment, written and communicated the same way.
Don't allow them to listen or copy each other's ideas. Then watch how they
present their results. You will see some duplicity, but you will also see
a vast array of creativity because this is how people share their unique gifts
and talents. In any group, if two people see something entirely the same
way then one of them is redundant (and unnecessary).
Instead of think-tanks,
try going to places where we are most likely to access our creativity.
Where are these places?
a. Nature. Sitting
on a mountain, swimming under a waterfall, sitting at the beach staring into the
surf, hiking though trees and plants, climbing a rock, or other nature
activities are the first and best way to access creativity.
b. Art. Find art -
in music, a museum, a street fair, the library. In art lies the dreams and
visions of mankind. We must use our art to spur our ability to
vision. I find that music, drawing, and writing are all outlets that
enhance my creative thinking.
c. Get out, do something
different. Upset your homeostasis so you see things differently.
Dress differently. Go a different path. Go places you'd never
normally go to. Sleep or get up at different times of the day. Spend
time with people who are older or younger than those you hang out with
now. Upset your homeostasis, then start asking questions. Why do
they do this? How did this happen? What does this mean? What
can I learn from this? Does this apply elsewhere? It is hard to see
different perspectives unless you put yourself in the midst of them.
d. Take away your safety,
value, and power and start to see what you must do to rebuild those three
components of successful living. Without shelter, we have no safety.
Without friends or a job or anyone to give to (pets, friends, loved-ones), we
have no value. Without power (money, influence, spirit, strength) we have
no way to get things done. These three components are required for
anything to be successful. It must be relatively safe, increase value, and
give more personal or corporate power, or people won't buy it. Once we get
outside of the box, we can start to see what's missing.
2.
IMPROVE - what can be improved or replaced?
What are other people
doing now, but it could be done better? If a company determines that
by automating a process they can eliminate 30% of the manpower needed and
increase their time to deliver their product by 200%, what are the odds they'll
buy the automation program if it demonstrates an ROI (return on investment)
within 6 months? That's right - the odds are high.
Products, services, and processes that are RIPE for REPLACEMENT are as follows:
a. Manual process.
If it requires people to touch it, it is going to take more time to deliver.
b. More steps than
necessary. Dell used this approach - they still sell computers, just like
IBM, Compaq, HP, Acer, Everex, Wyse, and many others who are now no longer even
selling computers. They are now #1 in market share. Why?
They sell DIRECT! What this meant is they eliminated a layer of cost and
overhead in the distribution model. Where Compaq and IBM sell primarily
through a channel of resellers (which have buildings, distributions handling
costs, SG & A costs, and other overhead), Dell sells direct (thus
eliminating a large percentage of cost and time delay in fulfilling an
order). Dell is the first company to pioneer "build-to-order" on
a large scale. They did this because they had fewer steps between the
manufacturer building a company and the customer who buys a computer.
c. Too costly or
outdated. If the current product is slow, too costly, or doesn't do very
much, consider ways to improve the product. Also, consider if something
else might substitute the product. For example, eggs are a product people
enjoy eating. However, those with high cholesterol can't eat eggs
anymore. Solution? Food that looks and tastes like eggs but isn't
eggs (no cholesterol). Egg beaters has made a lot of money selling
"non-eggs" that replace eggs.
d. Poorly
marketed. Many companies have a great product, but no ability to market it
well. In this case, they need to polish up their story. An example
of this is a sports car. The Triumph and MG were the last successful small
sporty cars for a number of years, until Mazda announced their Miata
convertible. It spawned a dramatic shift in thinking in the auto market
where people clamored to get the little sports cars. Within fifteen years,
we now have the BMW Z3, Mercedes CL, Toyota MR-2 series, Audi TT, Porsche
Boxster, and countless other smaller convertibles or roadsters (Road & Track
car of the year for 2002: Ford Thunderbird). The Miata showed
that a convertible marketed properly COULD be quite successful. The others
simply followed the lead. Remember when Apple came out with the
Macintosh? It involved technology based upon technology Steve Jobs saw at
Xerox PARC. While Xerox had fantastic R & D (great engineers), they
didn't have a marketing brain attached to these ideas. Steve Jobs, a
master of marketing, took hold of their ideas and brought them to market.
3.
CONSOLIDATE - what can be consolidated?
EMC was the #2 company
on the NYSE for growth between 1990 and 2000 because they were able to help
Information Technology companies consolidate their storage needs. They
built a software platform and reliable hardware and an aggressive sales
team. Their message: simplify, control, and consolidate your storage
solutions. It worked. The key here is to look for the following
environments:
a. Fragmented,
many products doing similar things. Purchasing loves working with fewer
vendors - it keeps their life simple.
b. Economies of
scale. Why would someone hire five different gardeners to handle their
yard when one gardener could do the same job? Banks have been merging for
years in order to improve economies of scale. In just about every
corporate merger announced, economies of scale gets touted as a primary benefit
to shareholders. Where are their products that do the same thing but in
different locations? The two could be consolidated. Where are their
services that require call centers? Consolidating the services under one
call center roof can eliminate costs.
c. Combined or
integrate. If process, products, or services can be combined or integrated
into new technology, it may make sense to consolidate. An example would be
the internet. Where many companies used to offer stand alone products
(email, for example), the companies who enable you to email through the internet
have won the battle. The old email was company-centric and didn't talk to
the outside world. I remember the first large commercial email package was
Banyan Vines, and then CC:Mail became significant. But where are those
companies, today? Most people, today, use AOL or Microsoft Outlook.
I use Earthlink, because of philosophical differences with AOL and virus attacks
on
Microsoft. But the bottom line is that the internet has enabled many
companies to launch "applications" that used to be internal or
standalone and consolidated them to their internet platforms in order to
increase their economies of scale and ability to be more connected with the
outside world.
4.
EXTENSION - what processes/products/services exist in another industry but the concept could
be applied (extended to) here?
I call this the art of
repositioning and extension. If we recognize that a car is sold the same
way that our product is sold, then how can we take the selling methods of car
manufacturers and apply them to our business?
There are many ways to
apply process repositioning and extension:
a. Process
modeling. Amazon needed a better distribution model for their books and
products. Rather than re-create the wheel, Amazon looked to see who had
the best reputation for distribution efficiency. They turned to Walmart.
Walmart, over the past thirty years, put a lot of smaller companies out of
business by employing the economies of scale/warehouse mentality to their
industry. However, Walmart also had the most efficient distribution model
of any company. Amazon copied their process and hired their people and
effectively copied Wal-Mart's process model.
b. Creative
theft. Many companies in the information industry work diligently to
protect their knowledge bases. AspireNow is no exception. We've
found that within one year of launching AspireNow, no less than fifteen
companies either outright stole or very creatively borrowed names, business
ideas, or site designs quite liberally from AspireNow. They say imitation
is the highest form of flattery. It also leads to copyright lawsuits, so
be careful when you dabble in copying other people's material. I
don't recommend theft as a way to build your business - it tends to breed bad
karma.
Evaluation. If you
notice a company's approach to selling advertising in one industry, and it isn't
being utilized in yours, then consider evaluating it in a test market and see
how it performs.
In summary, the four
keys to innovate and create new products include:
1. What is new and
original?
2. What can be improved?
3. What can be
consolidated?
4. What can be applied
(repositioned) and extended to our industry?
When you can answer
these questions, you can create new products, programs, services, and business
processes. Best of success to you in your aspirations.
Scott
Andrews is CEO and Founder of AspireNow (www.AspireNow.com),
a leading business productivity and personal development firm based in
California. AspireNow helps organizations launch new products and
services, train sales teams, and innovatively change businesses through
cutting-edge business models and techniques to improve success. For more
information, contact Scott@AspireNow.com,
or visit http://www.AspireNow.com.
