Like the Peppered Moth, firms such as Apple and IBM have used dramatically changing market conditions to their advantage. Melanie Fotiades explores how you can use innovation to help your organisation gain an evolutionary edge and outlast your competitors
The UK’s Peppered Moth exists in both light and dark colours, but during the industrial revolution, many of the trees the moths rested on became blackened by pollution. This gave the dark coloured moths an advantage over their previously more prevalent paler relatives, when hiding from predators. With the Clear Air Acts of 1956 and 1968 however, the trees became lighter again and the dark coloured moths once again became the most visible, and thus the paler moths rose in numbers again.
An interesting thought for organisations that are facing unprecedented economic climate changes. However, unlike the humble moths that have evolved a two colour scheme to survive environmental changes, businesses have the ability to adapt in multiple ways. By making one or more key changes, a single organisation can gain an edge that will enable them to outgrow and even outlast their competitors.
Many organisations have used dramatic changes in the market to their advantage. IBM, for example, introduced its first personal computer running MD-DOS in August 1981 during the crash of the '80s. And Apple's newest inventions – namely the iPhone and iPod – created during the last recession, helped to buffet them against the recent slump with a reported 15% jump in profits in the first quarter of 2009, predominately from iPod and iPhone sales1.
Gaining that evolutionary edge
Whilst organisations are justifiably managing their resources and expenditure more cautiously, latest market analysis suggests that we could be waiting until early to mid 2010 before the economy recovers2. The question is, can you afford to wait and be cautious, or could you use this time to get creative and gain that evolutionary edge?
For the brave, gaining that edge over competitors will mean doing something that is truly innovative to set them apart. But innovation is not necessarily about creating something completely new, but also can mean creating something based on a collection of old ideas, or an old idea applied to a new situation. The key is it’s something new, that your customers will love3. You can also be innovative about different aspects of the business such as product, process, information or how you operate. And it can occur at various levels – the individual or team level, in a key area or division, or across the whole organisation. The possibilities are endless. The important thing to note is that it’s about using a creative approach to bring about innovation. And it doesn’t have to mean a huge investment or finding additional resources that you don’t already have either.
How? Firstly, an organisation needs to foster the kind of culture that supports and nurtures creativity in order for true innovation to be born. ER Consultants regularly work with organisations locally and globally to help them tap into different dimensions of their organisation to unleash their creativity using various approaches and models. Many books have been written on the subject, but in our experience simple and effective procedures can be put in place to harness a creative environment where innovation can be born (see Creative Innovation below).
Secondly, a well considered investment is critical. Executive leaders need to decide what they need to achieve, why, when and where, to help focus their creative energies. External facilitation can help organisations realise this. Recently, for example, we ran a strategic away day with the Board, including non-executive directors, for one client to help them decide where to focus their energy. We facilitated an interactive and creative process where a range of future options were explored and a new direction set. To help organisations do this we use specific prompts such as:
- What does you customer value most about you?
- Why do they buy your services or products?
- Where are your current and future potential customers based?
- Where are you involved in the supply chain and how does this add value?
Answers to these fundamental questions can help an organisation to focus on what aspects of their business could do with a bit of creative injection to support innovation, and to what degree.
Making innovation happen
In ER Consultants’ experience, innovation can occur at the individual or team level, in a key area or division, or across the whole organisation. Through individuals or as a team: At this level, it’s about taking a step back from the routine activities and making small changes to current practices. To enable individuals tap into creativity, we offer focused coaching sessions or support that helps them to develop their creativity. For teams, facilitated workshops that help them to take a step out of their comfort zone, enabling a fresh perspective can make a real difference. We also work with executives to enable their teams to assume delegated responsibility to make the required changes at a local level to improve the business without the need for approval.
To create a real buzz at this level, organisations could identify individuals with skills that can effectively be used as catalysts for new business growth opportunities. These are people who thrive on variety and challenging experiences, and have an ability to spot opportunities by making connections between things that others just don’t see. We have worked with organisations, such as a global professional services firm, to identify these people using our diverse profiling and benchmarking tools. The result – business growth through higher margins whilst also using them to help successfully integrate new businesses. For further information on this, log onto http://www.erconsultants.co.uk/ot/people_talent/new_business_catalysts.
In an area or division: This is about creating a major improvement that is significantly different from existing practices or solutions. This could include creating a new product, changing the way a division operates, or a new way of managing and using information e.g. customer or supplier insights. There are many different tools and creative methods that could be used to achieve this such as a cross industry innovation forum that ER consultants have run; or conducting a range of customer research activities through highly interactive product or service development processes to ensure that crystal focus on customer needs, such as those offered by Serco Usability Services.
ER Consultants recently worked with a B2B commercial team to help them significantly improve their customer service, by shifting from a product-based approach to a behaviour-based approach through a detailed customer survey. This enabled them to create new propositions for customers and enabled buyers to self select the propositions that best suited them.
Organisation or industry wide: At this level, there is a fundamental change across the whole organisation that is a combination of all of the above, and as a result could impact an entire industry or way of life. This is the ultimate edge for a company to thrive beyond the current climate. To make this happen, an organisation could go through a rapid organisation redesign process, look at creating joint-ventures with complementary organisations to create something compelling and new for customers, or use cutting edge technology to engage in an entirely different way with themselves and their customers. For example, through the many Web 2.0 propositions such as podcasts, blogs and social networking technologies (i.e. Facebook).
ER consultants worked with a fast moving consumer goods organisation to reorganise themselves from a functional to category-led organisation after they realised their core product stream was in decline. This redesign and refocus of staff cleverly enabled them to balance maintaining their core business with increasing capacity to focus on their innovative potential growth products.
Opportunity for survival
The key to choosing a successful strategy is to understand your environment, particularly your customers’ needs; and then adopting behaviours to focus your energies and make a change that sets you apart from all your competitors. Going back to the Peppered Moth, as a species they have survived because of their ability to adapt successfully in a changing environment. For organisations, the current changing economic environment offers the opportunity to not only survive, but to evolve and thrive. It’s up to you to grab it.
For more information, contact: Melanie.Fotiades@erconsultants.co.uk
References:
1. iPhone helps Apple profit growth, BBC News Online, BBC, 22 April 2009
2. Slow, fragile recovery predicted, BBC Business News Online, BBC, 20 April 2009
3. The Truth About Innovation, Max McKeown, Pearson Education Limited 2008
CREATIVE INNOVATION
True innovation can only be born in a culture that supports and nurtures creativity. In ER Consultants’ experience simple, cost-effective processes like these below can be put in place quickly to harness a creative environment.
Focus on the customer: Listen and stay curious about what your customer needs and find ways of meeting them.
Stay future focused: It’s not about short term gains; we only need to look into recent history to see where that got us.
Find the innovators: Identify those in your organisation who are resilient to change and tenacious; encourage their curiousity and willingness to take risks.
Reward diversity: You will need a variety of skills and roles to turn the seed of something new into something that your customers will use and love.
Focus resources: Resources should be focused on where they will have the most impact, and ensure your supporting infrastructure doesn’t inhibit change as staff will need easy access to data.
The 'Coach' Approach: Adopt a more coaching approach to manage at each level, rather than a dictatorial approach to support creativity.
Nurture and challenge: Give time and space for new ideas to be born, nurtured and then challenged and tested before thinking about delivery – take small risks that could lead to potentially significant gains.
Turn ideas into something real: For those ideas that survive the scrutiny, don’t be afraid to make them a reality (remember Apple’s iPod success).
Recognise success: Get creative about how you celebrate success, but make sure you also learn from mistakes.
