You know how it goes. These times, if you’re not innovative, you’re the black sheep. But what’s innovation good for? And how on earth can you leverage on that to boost your revenues? We wrote the ultimate innovation guide to answer just that.
Yes, you know the drill. And yes, you have heard the term innovation ad nauseam.
Some firms tend to get stuck with developing endless features to existing products, others dive headfirst into disruptive innovation.
Those lionhearted grow with innovation since day one. Their revenues are boosting and we know the secret. Can you keep up with the pace?
Here’s the deal: we have grouped the most brilliant and up-to-the-minute examples of innovation into what we call “The 4Ks”. We will walk you through our innovation guide and what we think are 4 fundamentals in innovation.
Our 4Ks are: keep it simple, keep it dynamic, keep it together and keep it digital.
In this post, you’ll find case studies, success stories and action plans, so you can get started today.
1) Kiss – Keep It Simple, Stupid
The first point in our innovation guide is about keeping it simple.
Fast innovation pace does not equal profitability. The more you continuously launch and add new products, the more complex your company’s operations get, overloading your value chain.
When organizational complexity reaches its peak, it suffocates innovation. Ideas fall through the cracks, knowledge gets lost between divisions and opportunities are missed.
Take the Heinz case. Its over innovative strategy brought to the development of a range of products customers didn’t even care about. Many of their sauce variations did not meet customers demand. In fact, it let them confused about the brand.
To change things up, and break with their innovation faux-pas of the past, Heinz started conducting customers studies and analyses, as well as investing in R&D. This led Heintz to focus on its innovation nucleus (turned out to be the Hot & Spicy sauce, who doesn’t love that).
As a result, sales were boosting and the brand got fortified.
So what can we learn from the Heinz case? Well, KISS (Keep It Simple Stupid) or put in another way: Keep your innovation strategies simple to avoid overload and boost revenues by focusing on your innovation nucleus and improving your R&D department.
Revenues will follow. We promise.
The action plan
Seek a balance where simplicity and innovation are in harmony. This research shows how 70% of the companies interviewed blamed low profits and high costs on our scapegoat: complexity. Are you one of those 70%? Then keep reading our innovation guide for the juicy details…
The quick fix: Find your innovation nucleus. Harvard Business Review, agree with us on the complexity issue. We read this article for you, which basically boils down to finding the core of your innovation.
What is that one innovative feature that defines your brand? Keep in mind, too much innovation causes confusion and pressure not only on your value chain but on customers as well.
The long-term: Invest and simplify your R&D department.
Research conducted by the European Commission shows how innovation deeply impacts sales.
It gets as crazy as innovative products accounting 10% of most companies’ annual sales. Now, isn’t that worth investing a tiny bit more in R&D?
On top of that, a global management consulting firm did us the favour of putting together fancy graphics, statistics and tips on how to simplify your R&D so that everything runs more smoothly. The drill is that simplification of your R&D department equals more innovation which equals higher profits.
We like that, don’t we?
2) Keep it dynamic
The second point in our innovation guide is about keeping it dynamic.
Keep your innovation strategies dynamic by leveraging inbound knowledge flows and capitalize on the most innovative business ideas.
Great ideas come from anywhere… And anyone.
Ever heard of “open innovation”? It’s the hot topic these days (see this short video for the basics of open innovation.)
It implies that the vertical journey from lab to market where knowledge is kept within a single firm is obsolete.
To keep the competitive advantage, firms should rely not only on their internal knowledge ( e.g. the R&D department) but seek external sources who might have a lot to pitch in. Now, you may think that this is contradicting completely, the point above. But by no means this is the case, it’s all about getting the two to work together and compliment each other.
What does this imply for companies? Basically, firms need to take advantage of the abundance of knowledge and new ideas floating out there, externally as well as internally. See here how P&G went from 43 to 83 billions in revenue in 5 years by developing half of its products through open innovations.
We believe the internal/external innovative dynamic duo will give you the perfect juice. What’s the bottom line? Keep reading our awesome ultimate guide to innovation to tackle the issue.
The action plan
Some brainstormed ideas to get you started sound like this.
The quick fix: Set up an innovation lab to attract talent and create/improve revenues. The purpose is to conceive and implement new types of innovation. Easier said than done, right? Luckily for you, we wrote the perfect guide to get you started.
The long-term: Partner up with a savvy start-up! The key-word here is co-creation aka let the smart minds do the work.
Take GE, for instance. In 2014, they launched an open community space to co-create innovative appliances. The goal was to boost innovation and bring smart products to the market, faster. The secret lies in the fact that you’re tapping in a whole variegated pool of talents, which will give your product an angle you never thought of.
3) Keep it together
The third step in our innovation guide is about keeping it together.
The way to go to be innovative is having everyone with you. Without everyone on board, divisions go different ways, goals are unclear, time is wasted and profits fall. Get your organizational culture to follow.
What’s the point? According to these guys 94% of senior executives agree on organizational culture being **the **most important factor when it comes to successful innovation. On top of that, Bain interviewed companies in 40 countries and found that 94% (yes that’s also 94%) of them saw internal barriers as the cause of falling profits (find the statistics here).
Innovation needs direction, leadership and strategy. Developing a clear vision and setting goals for innovation bears an organizational and communication effort with it.
The action plan
The quick-fix: Make detailed plans and extremely detailed micro-goals, keep track of those and analyze improvements continuously. If this sounds complicated, do not despair, Forbes has you covered.
The long-term: Improve your organizational culture in the direction of innovation. Make your employees feel heard and valued, voice their ideas and make them matter.
Suddenly, you will find yourself with a workforce who knows its opinion matters, and you will be able to leverage on that ocean of knowledge and innovative ideas. So much that you could end up looking at a number as big as a 240% increase in performance-related business outcomes (result of an actively engaged workforce, a report by Gallup’s State of the American Workforce).
4) Keep it digital
The fourth and last point of our innovation guide is keeping it digital!
What does employee engagement have to do with sales? Well, your employees are the ambassadors of your company. They are the red thread between your brand and your customers. What is the first immediate consequence of an unsatisfied, unheard employee?
Decreased consumer willingness to promote the brand, to quote one.
Customers are directly influenced by the attitude of your brand’s ambassadors. Especially sales representatives.
Hence, taking care of your customers (aka your revenue) means taking care of your employees. Our friends at Gallup found how companies with highly engaged workforce outperform their peers by a staggering 147% in earnings per share (read it here).
If you are seeking a strong brand enforcement (and who isn’t?), then you gotta make your employees believe in you and in what they are doing. This will automatically raise satisfaction and engagement and therefore possibly raise productivity in terms of innovation.
How do you capture the value of this golden mine that is an engaged workforce?
The action plan
The quick fix (and the long-term!): Provide an innovative, digital space to generate ideas. This does not happen from one day to another, nor it requires an incredible amount of time.
Granted, the introduction of yet another digital platform should not create more confusion, complexity or stress in your organizational culture.
A focus on employee mindset and alignment across the organization is much needed. A digital platform can highly increase employee engagement, bring unexpected innovative ideas in and boost revenues. It should improve daily work activities, not hinder them.
Choose a user-friendly, brainstorming software which provides appropriate onboarding services and is flexible enough to adapt to your business. We at Ideanote might have just what you are looking for.
Our innovation guide: what’s the big deal?
You don’t need to invent the next Iphone to achieve a positive ROI on your innovation efforts. However, you do need to step up your game and have a plan outlined. This is where our innovation guide comes in handy.
Summing it all up, here’s our 4 step-innovation guide to boost revenues and be innovative (yes, again!):
KISS aka Keep it simple: Find your innovative nucleus, invest and simplify your R&D department;
Keep it dynamic: Embrace open innovation but don’t forget internal improvements. Try set an innovative lab up, or jump into co-creation spaces.
Keep it together: Get your organizational culture to follow your innovative drive. Make detailed plans and agendas and give a voice to your employees;
Keep it digital: Provide an innovative, digital space to generate and share ideas.
Being innovative is hard work, but it will most likely pay off. In fact, people won’t probably buy from you unless you dare show your innovative side (this research shows how 84% of customers think it’s very important the company they buy from is innovative).
So, what are waiting for? Find the innovation flow that best fits your strategy and your company culture, roll up your sleeves and get at it today! If you feel like you can’t get enough of valuable innovation insights, head over here, where we compiled 59 of the most valuable and actionable innovation resources out there!