Business innovation is about creating new opportunities for an organization to reinvent its core offerings, revenue streams, and enhance the value proposition for existing or new customers, thus renewing its whole business model. Business innovation springs by understanding the structure of the market, thus adapting or anticipating those changes.
Business vs. technological innovation
The primary misunderstanding about business innovation, which leads to inaction is believing that reinventing or innovating your business starts from technical implementations.
Innovating in business means redefining value for your existing customers to understand how to enhance it. Or determining what new value can be delivered to new customers with similar needs. Or yet, defining a whole new set of values to be delivered to a new customer base.
We can start the process by mapping our business boundaries.
Define the value customers get and your business boundaries
In order for you to redefine and innovate, you need to understansd first the current value your provide.
For instance, if you have a barbershop, are people just coming to you to cut their beards? Not really, many of those people might come to you for several reasons:
- They want to look good
- The place is near to their home
- The environment is good
- They like to talk to you
Based on the reasons above you can develop a whole offering of services and products. For instance, if you’re just cutting hair, why not sell some of the products you select to your customer base?
Understanding the needs of your customers help you structure an offering:
- Sell-related products
- Add-on offerings for related services
- Simple offering with a flat fee
- Subscription-service kit with curated products
Within and beyond your business boundaries
By setting the boundaries of your business and existing customer base, you can also define those experiments that would provide further value and enable your business to transform.
This also means being able to experiment with:
- Providing more value to existing customers with an expanded offering
- Create a whole new product for an existing customer base
- Tweak an existing product to serve new customers
- Or build a whole new product for a new customer base
Let’s see now some case studies and examples from how companies are reinventing or surviving difficult times.
Redefining value: case studies
Google content hub
In some cases, a tweak of an existing product or platform can provide much more value to the existing user base. In the case above, Google has built a temporary platform on top of its search capabilities.
Airbnb virtual experiences
Airbnb is experimenting with a new form of experience on the platform. By leveraging on its existing base of hosts, the company is inviting existing and new hosts to structure their online, and virtual experiences on the platform.
Uber’s work hub
As highlighted on Uber’s website “Uber Works, connects people to shift work like food production, warehouse, and customer service in Chicago, Dallas, and Miami.“
Uber is experimenting with this program to sustain its drivers’ user base.
Beachwear making masks
In some cases, you don’t need to reconvert the whole business model to make it survive in difficult times. All you need is to levarage on the existing capabilities of the business to come up with a product that people need.
That is how many beachwear fashion brands are converting their products into fashionable face masks, which will help the conversion of the business, while incentivizing people to wear masks.
From cars to ventilators
Car companies or companies, in general, are converting existing facilities to produce something in high demand right now.
From restaurant parking lot to drive-in cinema
What used to be the most valuable area of the business (the eating area) is becoming less so for many restaurant businesses.
Indeed, many restaurants around the world are figuring that their parking lot, indeed, can be used as a new business unit.
And in some cases, restaurants are partnering up with Cinemas to create a new experience, where people can drive in with their cars and watch shows in the parking lot. Here an interesting case study.
From valet service to drive-in click and collect
Where the business cannot be run physically, why don’t you convert that digitally? That is what some valet services are doing by introducing drive-through click and collect services.
3D printing COVID equipment
Decentralized manufacturing might become among the most important commercial use cases in an era where travel is restricted. That is why 3D printing companies are pushing to produce equipment needed during these times.
From co-working to virtual co-working
Co-working spaces are among the most hit by this crisis, and it’s hard to understand at this stage how to convert a business heavily invested in real estate to virtual, or semi-virtual.
It’s fundamental to ask “what value can we provide?” and redefine the services they offer.
People, like Seth Godin, are already experimenting with this new format with the launch of the Akimbo Virtual Coworking.
Now a service that might be offered for free, it might be leveraged by co-working companies to redefine their businesses.
From stage to virtual concerts
The Group called Real Estate launched Quarantour, a way for people to experience a sort of virtual music tour from the band on their phones.
From hotel rooms to quarantine rooms
Many Hotels are utilizing their spaces to accomodate people for quarantine. With restrictions in place, and people not ready to travel, hotel businesses are reorganizing their spaces to support the crisis.
From WFH to hotel rooms as offices
As working from home for many is impossible due to several reasons (small home, crowded family, too many children around) hotel rooms might become a sort of productivity heaven. Thus, some hotels might reorganize to offer those rooms as an alternative to offices.
So we move from co-working to hotel rooms as offices.
From influencers to infludancers
As the Chinese app TikTok, owned by ByteDance, gains traction. More and more people join in. And in this era of forced isolation, people rather than spending time to rethink their lives, spend time crafting from basic to advanced dances, which are very popular memes on the platform.
As those “infludancers” gain more and more attention, they might make the past made of influencers look something of the past. And they are figuring how to monetize the attention gained on this highly contagious platform.
What macrotrends is this scenario pusring forward? For sure, that is acceleraging the development of industries that otherwise would have taken still years to develop.
Some of these areas go from e-commerce to blockchain and crypto.
E-commerce and forced digitalization
As we help thousands of businesses to move online, our platform is now handling Black Friday level traffic every day!— Jean-Michel Lemieux (@jmwind) April 16, 2020
It won’t be long before traffic has doubled or more.
Our merchants aren’t stopping, neither are we. We need 🧠to scale our platform.https://t.co/e2JeyjcEeC pic.twitter.com/6lqSrNUCte
Many businesses that resisted for years the digitalization process are now jumping online to survive.
With a difference, that this level of traffic is now on a daily basis.
In a recent blog post Zoom explained the explosion of usage on the platform:
We also feel an immense responsibility. Usage of Zoom has ballooned overnight – far surpassing what we expected when we first announced our desire to help in late February. This includes over 90,000 schools across 20 countries that have taken us up on our offer to help children continue their education remotely. To put this growth in context, as of the end of December last year, the maximum number of daily meeting participants, both free and paid, conducted on Zoom was approximately 10 million. In March this year, we reached more than 200 million daily meeting participants, both free and paid. We have been working around the clock to ensure that all of our users – new and old, large and small – can stay in touch and operational.
While we can expect this phenomenon to normalize, there is no doubt, that remote working will become a key mode of work in the coming years.
Where mostly engineering-driven, digital organizations had already embraced that model, now many companies have been forced to that. And we can expect this trend to continue as it will not be possible for companies to declutter their office spaces in the short term.
From global to local tourism
As travel restrictions might continue in the coming months, usually crowded tourism locations will need to redefine their mission, to add as much value as possible to local communities.
Tourism then can go back to becoming local.
In the book, The Inevitable, Kevin Kelly highlighted how among the forces that might shape our future, there is “remixing.” Or how economic growth in the coming years might be driven by taking existing resources to “rearrange them to make them more valuable.”
Therefore, for many businesses out there the answer is already there, it just requires (as we saw above) cretivity and willingness to experiment to make a business viable in this time.
In other cases, the change needs to be radical instead. In those cases, it makes sense to wait and see, and in the meantime trying to get support for your business.
Where humans can’t be in the loop, robots might become the providers of basic services (in delivery services or assistance in the healthcare industry) even faster then we thought.
Where the political debate moved to make sure people would not remain jobless, it might move toward making sure the economy doesn’t stop, and robotics can be an important solution.
If central systems will be incapable of tackling systemic issues, decentralized solutions, like cryptocurrencies will grow even quicker. And that might make banks, and central banks less relevant in the future.
Where central systems risk collapse during hard times, decentralized systems might prove more robust.
Blockchain commercial applications are also moving faster.
- Trends that required years of consolidation gained traction during uncertain times. With that, the whole market structure changes rapidly, thus calling for a quick assessment of where and how your business sits in the marketplace
- Business innovation is not (primarily) a technical problem. It starts instead by redefining value for existing or new customers
- In many cases, business model reinvention starts by reorganizing resources around an expanded value offering for the existing customer base
- In other cases, it requires a whole new definition of value, and with that an important reorganization of the overall company
- In some circumstances, business innovation is a matter of survival
- And for others a matter of opportunity
- Whichever scenario you’re facing, you can evaluate whether it makes sense to wait (look for government support), reorganize, or reinvent!
- Definition of Business Innovation: Business innovation involves creating new opportunities for an organization to reinvent its core offerings, revenue streams, and value proposition for both existing and new customers. This often leads to a transformation of the entire business model. Understanding market dynamics and adapting to changes is crucial for successful business innovation.
- Misunderstanding and Technical Implementation: One common misconception is that business innovation primarily involves technical implementations. However, true innovation starts by redefining value for existing customers or identifying new value propositions for new customer segments.
- Value Redefinition: Business innovation revolves around understanding and redefining the value that customers receive from your offerings. This could involve expanding the range of services or products offered to cater to broader customer needs.
- Mapping Business Boundaries: To innovate, it’s important to define your business’s boundaries and identify the current value you provide to customers. This helps in understanding the breadth and depth of your offering.
- Case Studies – Redefining Value:
- Google Content Hub: Google created a dedicated content hub for COVID-related information, transforming intent-based searches into a separate platform to help people deal with the crisis.
- Airbnb Virtual Experiences: Airbnb introduced online virtual experiences, leveraging its host base to offer unique online experiences to users.
- Uber’s Work Hub: Uber launched Uber Works, connecting people to shift work, such as food production and customer service, to support its driver community.
- Beachwear Making Masks: Some fashion brands repurposed their capabilities to produce fashionable face masks in response to the pandemic.
- Car Companies Manufacturing Ventilators: Car manufacturers like Tesla, GM, and Ford converted their facilities to produce much-needed ventilators.
- From Co-Working to Virtual Co-Working: Co-working spaces are exploring virtual alternatives to adapt to changing work environments.
- From Stage to Virtual Concerts: Bands like Real Estate are engaging with fans through virtual music tours.
- From Hotel Rooms to Quarantine Rooms: Hotels repurposed their spaces to accommodate people for quarantine purposes.
- Macrotrends and Impact:
- Trends such as forced digitalization, remote working, local tourism, and the adoption of robotics and cryptocurrencies are accelerating due to the current uncertain times.
- Economic growth could be driven by “remixing,” rearranging existing resources to create more value.
- Key Takeaways:
- Business innovation is not limited to technical implementations; it involves redefining value for customers.
- Redefining value can occur within the existing customer base or by targeting new customer segments.
- Depending on the scenario, innovation could be a matter of survival or an opportunity for growth.
- Businesses need to evaluate whether to wait, reorganize, or reinvent their strategies based on their unique circumstances.