This section provides insight into the three key areas we see driving innovation success in businesses: use of technology, embracing an innovative culture and frequency of stakeholder engagement.
“The crisis is set to amplify a quicker adoption of new technologies. In the long run the firms that survive will have to master a new environment.”
The Economist - 8 April: A corporate survival guide
We all know that technology developments have been changing the business landscape irrevocably, creating both huge opportunity and huge disruption. Today the old models of competition are proving less relevant as traditional barriers to entry are obliterated by technology and the current crisis will only speed up technology adoption and all the changes it brings.
The data presented in section one shows us that investing in new technology is the power behind most business innovation. What we also see is how this technology adoption is giving businesses a direct advantage over their competitors. Businesses using technology, particularly around changing business models and improving efficiencies, are achieving greater success than the average business.
Business model innovation will be at the heart of change going forward.
Innovating business models is challenging and the bigger and more established the industry the more difficult it is for incumbents to think outside the box. In ‘normal’ times business model innovation has not typically attracted as much investment of resources as innovating products and services or process enhancements. Now in crisis, businesses are going to be forced to re-think everything they do. As traditional supply chains are stressed, traditional markets change 180 degrees or disappear, and businesses take on more debt, many businesses will now need to explore alternative models to survive. Those that have already done so will have a head start.
How companies that are fundamentally changing their business model through the use of technology are more successful and confident than the average business*:
How companies that are effective at applying technology to improve the efficiency and effectiveness of their business processes are more successful and confident than the average business:
An innovative culture:
“In times of rapid and unpredictable change, the creation of individual products becomes less important than the creation of a general organisational aptitude for innovation.” — John Seely Brown, Xerox
Simply investing in technology is not enough. Businesses need to have the right mindset to be successful with technology innovation and investing only in technology is unlikely to yield optimal results. Innovation needs to be embedded in the culture of a business and the data shows that making innovation part of everyone’s role is a real game changer for success, especially compared to those companies who rely instead on internal teams.
Making innovation everyone’s role is crucial to business success.
How companies who say that ‘innovation is part of almost everyone’s role, where employees are encouraged to innovate whenever and wherever they can’ are more successful and confident than the businesses who rely on a small group of specialists internally to drive innovation:
‘If you aren’t measuring it then you aren’t managing it’ Business proverb
Perhaps one of the most striking success criteria in the innovation study was how frequently a company seeks feedback from customers (or internal users), when designing a new innovative process, software application, product or service. Overall, 36% of companies seek feedback monthly or more frequently, 28% quarterly, 24% annually, 8% less frequently than annually and 5% never seek feedback.
How companies who seek feedback monthly or more frequently are more successful and confident than the average business:
This will be a wake-up call to many businesses. As COVID-19 drives more businesses to embrace digital services and solutions, the question of continual feedback will be critical. This will be second nature to businesses operating in sectors where design is already a core element of their business model. In other sectors, such as professional services, the move to embrace product design and development will require a complete change in mindset. It will be interesting to see how sectors where design has not historically been key, learn from others as this develops.
One of the best examples of a business that excels in customer feedback, monitoring product traffic and sales daily is Amazon. A case study of https://www.smartinsights.com/digital-marketing-strategy/online-business-revenue-models/amazon-case-study
* It is important to remember that the ‘average’ business in this study has met strict criteria around financial success, innovation and ethics as part of the European Business Awards, so it represents a higher level of success from the start.