5 opportunities to discover your High Impact Innovation

In this article we will investigate the 5 opportunities to explore to discover high-impact innovations.

Before embarking on the path of exploring new opportunities, the first necessary step is to remove a very common obstacle in companies and among individuals: the aspiration to be the best. Wanting to be the best in your field, for example, forces you to look only at what you already do, in a self-referential way. You will look at your products and services and try to make them better and better, or little better than what your competitors already do. This is often done in the hope that the market and customers will recognize that improvement enough to pay you back for it.

By continuing to improve existing products, however, it is not certain that the customer’s needs will be met or that the market will recognize the product as innovative or that there will be any major recognition in terms of brand, revenue, or market expansion.

Incremental innovation is rarely recognized and rewarded by the market. Looking only at your own product does not allow you to intercept new customer needs: it takes us away from the needs of the market and the new propositions you could make to customers.

Adapting to your industry’s product/service range does not foster innovation

Another constraint we encounter when being too self-referential is to look only at products in one’s own industry. This attitude leads to always comparing yourself with the usual stakeholders, pushes you to always wrestle with the same competitors, and to remain confined to products (and services) related to the range, the past, and what the market already gets, from you and your competitors.

There is a risk of adjustment to the functional or emotional approach that the industry already has: they will tend to ride on criteria and trends that are already operational for fear of straying too far and failing.

Always looking to the same group of customers means striving to please those who are already buying your products, and this misses out on a slice of new opportunities. Potential customers who don’t know you yet, but are getting products or services from other competitors, or even companies outside your scope, that you too could provide.

Let’s look at what you can do to conduct real explorations outside your own borders and derive strategic ideas that can open up new areas of opportunity.

1. Exploring alternative sectors

Exploring alternative industries to our own is the first step in going in search of new opportunities. To give an example of how this kind of strategy works, we can look at multiplex cinemas.

In order to innovate their business and regain a slice of the customer base, they have looked not only at their direct competitors (traditional cinemas whose offerings are being surpassed by more films on offer, or more shows), but also at related sectors. It may seem strange to consider catering a related sector to cinemas, but it is also true that both of these places solve a single problem for the consumer: to offer a pleasant evening and spend a few hours in company, eating or watching a movie.

The “smartest” theaters have been precisely those that have been able to combine the two needs-viewing a movie and eating-and have been able to find formulas to bring food into theaters and “steal” small slices of the market from restaurants by taking people to see a movie in places where you can also eat something.

2. Study strategic groups in the industry

High-end, mid-range, and low-end are ever-present gradations in any industry.

Studying strategic groups that are in different gradations of industry can be an interesting endeavor. Even if your business is in the high end, it is not out of the question to learn something from those in the low end. And vice versa.

These operations are called trading up if those in the low end are inspired by or copy and repurpose actions already implemented by those in the high end of the same industry; but trading down operations are not unthinkable either, if companies in the top end study success stories and repurpose solutions adopted by companies in the low end.

An example can be given for better understanding by looking at Zara, low-end-if you will-in the fashion world. It is the most widespread and profitable democratic, low-cost chain in the world.

What has Zara copied from the top end of the clothing industry? The location of its stores and the design of its products, which are continually renovated and available low cost.

In fact, Zara is present in the capitals of the world (London, Paris, Milan, New York, Tokyo, etc.) with stores in the center of the city, as is already the case with trendy, world-renowned stores. Moreover, while continuing to sell low-end products, it copies the design of high fashion: ideas found in the top of the range become accessible at low cost.

3. Analyze the chain of buyers

Not stopping at the direct buyer, but looking at the entire chain of people related to the product/service can be a great help in getting ideas that can produce high-impact innovation. Let’s look at the story of Novo Nordisk, a Danish insulin manufacturer that invented the first pen to inject insulin. In the late 1980s, the typical customer of insulin manufacturers was the general practitioner, to whom scientific representatives promoted insulin products.

Looking at the entire chain of buyers leads to the genius idea: figuring out what problems to solve, not to the first-level direct buyer, the primary care physician, but to the patient himself, a second-level buyer.

The problem for the patient – end user – was the use of a syringe of a “hospital nature” that caused some embarrassment in certain circumstances and required a good deal of organization (use of bottles, absorbent cotton, disinfectant, syringe).

Novo Nordisk invented the first “human-friendly” injectable insulin pen that was easy to use and avoided the typical embarrassment of using this product.

Discreet, safe and practical, the pen allowed the insulin dose to be administered easier and faster than the traditional syringe and vial; in addition, the needle was much smaller and thinner. All this translated into a positive impact on the quality of life of the person with diabetes.

This has enabled an incredible breakthrough in the world of insulin delivery.

Today, Novo Nordisk products are among the most popular in the industry and are marketed in more than 180 countries; the company occupies 60 percent of the market in Europe, 80 percent in Japan, and has continued to evolve this product/service idea so much so that today the latest generation products are among the most user friendly in the industry.

4. Understanding current trends

It seems easy to look at current trends, but all that glitters is not gold!

Current trends seem-apparently-to be within everyone’s reach: one would think that if something irreversible is happening in the world it should be easy to notice and understand. Unfortunately, this is often not true.

Just think of the Blockbuster case: in 2008 they claimed they saw no competitors that could challenge them. We can say that they were looking exclusively at their own sector, the one in which they felt they were the best, without seeing what was happening in related markets where another player, Netflix, riding the current digital trend-now irreversible-was taking market share, stealing an important portion of the market from Blockbuster.

The customer no longer wanted to leave home and go get the physical product in stores scattered throughout the territory, because it was much easier to stay at home and enjoy, with extreme convenience, the digital products that Netflix began to distribute. And to think that Netflix’s first business, in the late 1990s, was not distribution through a digital platform, but a home DVD rental service, done through the postal service!

It is clear with this example how not looking at what is happening in the world can prove fatal even for a company like Blockbuster that was a colossus in its industry and thought itself invincible.

There are many trends going on in the world today; it is very important to try to understand which of these will impact our products/services and which will touch our customers because the changes are much faster today than in years past.

Suffice it to say that in 2004 there were 500 million devices connected to the Internet and by 2015 there were 10 billion. In 2020 there are an estimated 100 billion connected devices. This cannot be ignored when thinking about operational strategies.

But it is also true that it is not just about technology; different types of trends can affect your target industry: technology trends, consumer trends, and social trends. It is imperative, therefore, to understand which one is affecting our current customers or the potential customers of tomorrow and to continue to innovate.

5. Exploring the area of complementary products

To better understand let’s look at the case of Sacmi an Italian engineering company, a world leader in ceramic machinery, particularly machines for building tiles. Chinese competition was eating away at this company’s competitiveness, in China as well as outside.

To break this vicious circle, the idea that resulted in a big competitive advantage was to look at the customer’s problems and try to solve them in an innovative way. So the game was played on innovation and not on a product that is always more competitive the cheaper it becomes compared to the Chinese competition.

What were Sacmi’s customer problems and how were they solved?

The customer, a tile manufacturer, needs to change sizes (small – medium – large) to satisfy his end customer.

The machines, until a few years ago, had setup times for format changes of up to 10 hours depending on the type of tile and machine. The genius idea was to offer a complementary service, until then delegated to the tile manufacturer.

The idea of designing a machine capable of bringing mold change to as little as 30′ min. opened up the possibility of selling an innovative and complementary service to the market, and boosted sales by several hundred units each year. On high-cost machines this generated a major profit for the company along with a repositioning in the industry.

These are some of the examples for moving out of one’s own area to look at what is happening, to explore new areas: moving around, raising one’s head and looking at what is happening in different areas or close to one’s own.

Don’t just stand still on what’s happening today, but look at what’s happening today with a view to the future, to understand what tomorrow’s competitors will be or the critical issues that can put your business at risk.