There are always difficult times—for the economy as a whole, for individual industries or sectors of the economy, or for individual companies (and not forgetting Brexit). And in such difficult times, concentrating on current business and reducing investments in innovative projects is the natural response. Even so, cutting back or cancelling innovation projects must be a measure of last resort.
Why? Because time and again, the evidence shows that those companies which continue to invest in innovation during times of adversity are those that emerge ahead of the competition.
That said, it would be equally mistaken to blithely carry on with innovation on a business-as-usual basis. Difficult times are not business as usual, but instead are periods of adversity that offer opportunities—namely, opportunities for a business’s innovation function to contribute additional value to a company.
At Cranfield, we recognise three such opportunities as being particularly important:
- Sharpening the innovation pipeline
- Focusing on customers’ hidden needs
- Reinforcing the business’s innovation culture
Sharpening the innovation pipeline
An organisation’s innovation pipeline might contain new products, new services, or new process innovations. But is this portfolio of innovation projects positioned to ensure that the business emerges from adversity ahead of its competitors?
A critical review will typically flush out a number of common problems.
First, projects which are known to be failing, but where so much has already been invested that people are reluctant to let go. Be ruthless: do not let poor projects ramble on—because you cannot waste innovation capacity.
Second, is the innovation project portfolio targeted on delivering real competitive advantage? Many new products and services fail in the market because they cannot be differentiated from competitors’ offerings. Make sure you offer unique product (or service) features, which deliver tangible benefits to customers.
Third, ensure that the pipeline is a mix of high risk / high return projects, balanced with some more conservative ones.
And fourth, remember that innovation is not just about new products and services. So make sure the pipeline includes process innovations, such as significant improvements to manufacturing or service operations.
Focusing on customers’ hidden needs
Customer-focused market research is essential but often mistaken. Research shows that customers are often unable to articulate their requirements, and may not even themselves have realised the issues and problems that they face.
As Henry Ford put it, “If I had asked them what they wanted, they would have said ‘faster horses’.”
Instead, focus on hidden needs: needs which are real, and present, but unmet and unrecognised. You will need new approaches – such as ethnography – to identify these. Such research can be immensely advantageous, because the odds are good that if your competitors won’t have spotted such hidden needs.
That said, to identify customers’ hidden needs, companies must invest in gaining the expertise to apply leading edge techniques, such as ethnographic market research and repertory grid interviews. Without the insights provided by such methods, your investment in new products and services could turn out to be significantly underwhelming.
Reinforcing the business’s innovation culture
Exceptional times require an exceptional response, and the same is true of the business’s innovation culture. A period of adversity, when a clear ‘burning platform’ exists, is the perfect time to hone innovators’ drive to deliver—think, for example, of the advances in technology made during wartime.
Employees—all employees—need to be challenged. But don’t make the mistake of just asking them to think ‘outside the box’. This is because research demonstrates time and time again that woolly exhortations are likely to fail. Instead, set precise targets and goals, such as: “How can we develop this new product on the same schedule, and yet achieve a 20% saving on the cost?” Or: “How can we take non value adding time out of this customer-facing process?” And: “How can we reduce the weight of this product by 30%?”
Given such goals—and the added imperative posed by difficult times—it is often surprising what emerges.
