Maybe now it’s time to think about innovation.
Pivoting to grow
Being honest, if room44 had stayed wedded to its core business at the start of 2019, we probably wouldn’t be here today. When the pandemic shut the UK economy down, we had already opened a new venture that became our growth opportunity for 2020 and 2021. Since then we’ve also added a new ‘artisanal’ product stream to our portfolio and room44 innovation consulting has resurged.
This all came about from a reading of market trends that indicated strong growth in areas that we may not have leant into without an understanding of the probable impact of world events. We were deep into the Brexit transition back in Q1 2020 so ‘change’ was inevitable. All we had to do was take it seriously.
Old business clinging on to old ways
Since Lockdown #1, many thousands of people have seen huge shifts in their work lives. Lay-offs have released people to pursue their own dreams, as well as throwing others into the grip of financial despair. One impact of this is that the UK is doing better than ever at creating new businesses and poorly at letting old ones die naturally.
In Q1 2021 Companies House recorded a record increase in new company incorporations – up by 24%. According to Fathom Consulting, the UK now hosts @4.5 million privately owned companies and more Unicorns (£1bn+ companies) than France, Germany and Sweden combined.
So, the government has made it possible for new business to start, grow and thrive with more bounceback funding, including another £1.5bn available to support start-ups* but the same financial support has also allowed businesses that were struggling to stumble on for longer. Loans, grants and furlough funds have let companies reset. The downside is that some of them should have simply stopped being.
Hope as a strategy
An article by Matthew Lynn in The Saturday Telegraph a few months back argues that old business is clogging up the very system that should help new companies grow (Recovery depends on killing Zombie companies). It’s a good point. SMEs are a tenacious bunch and won’t give up easily, but hanging on and hoping isn’t a strategy.
Building a new vision based on new market dynamics, seeing a less-than-obvious opportunity and then acting on the vision is what will help old business survive. If you have any doubt, look at the current crop of start-ups – looking at things differently is exactly what they have done.
What is innovation?
If you’re a follower of Clayton Christensen, you’ll recognise the definition of disruptive innovation as being “a process by which a product or service takes root initially in simple applications at the bottom of a market and then relentlessly moves up market, eventually displacing established competitors.”
In the context of re-imagining a business’s potential in order to survive, maybe a less ambitious definition is appropriate. How about something like – taking ideas that work in other places that we can make work here.
Business development asks you to grow your business. Innovation asks you to offer your customers something different than they can get today to satisfy a need differently, or to meet a new need entirely. This isn’t innovation in its truest sense but, if the process demands that a failing business changes what it does for the survival of the company and gives their customers something newly valuable to buy, let’s give it the benefit of the doubt.
If you’ve relied on government funding to get you through a tough patch and are worrying about how to cover the wage bill now that furlough funding is over, now is a really good time to think about a change in direction.
As the saying goes, the best time to plant a tree was twenty years ago. The next best time is today. If you’re an established business who wants to talk to an agency that has done exactly that, drop us a line.
Future thinking. Future proofing. It’s what we do.
To stay relevant to your customers over the next couple of years you’ll need to be aware of mega trends: the very biggest macro factors.
Mega trends are those irreversible, slow-to-grow changes that we tend not to recognise as quickly as we might. It’s a bit like seeing a child (puppy, kitten) after a period of time: you notice their growth much more than if you see them every day.
Who do mega trends affect?
Mega trends affect us all. They offer opportunity and threat to business in equal measure. The opportunities presented by mega trends are visible to companies who actively look for ideas to grow. The threats that mega trends present are also clear to companies looking for ideas to grow. The message is this – if you’re not looking at trends, you aren’t seeing either growth opportunity or risk of disruption.
Here in the UK many brands, especially SMEs, are wrapped up in Brexit, and it’s become really easy not to look too far into the future. While Brexit is definitely a macro factor, it’s also been difficult to plan for.
True mega trends are usually easier to read than Brexit, and definitely more likely to open up an opportunity. These are some mega trends you might like to take a look at…
The sharing economy – this may be a hard one to get to grips with if you sell consumer products. As things are developing, your newest customers are making fewer capital purchases – but there are two sides to this.
If you sell sofas, you can rent out sofas. If you sell bikes, hire out bikes. The transition to a subscription model is not hard unless you just don’t see the need.
Personal Mobility – while governments around the world are pumping billions into the electrification of cars, there is an undercurrent of radical change that still has a long way to go.
Not only are cars and other vehicles subject to changes in fuel systems, with all the knock-on impact that will have on the automotive supply chain, but even this emerging market is under pressure from the sharing economy. This trend is going to run and run, and electricity won’t be the only fuel solution explored. This blog talks about this more:
Emotional intelligence – Human Resource departments are great at building systems to recruit team members who ‘fit’ with each other.
They have known for decades that IQ isn’t the only measure of probable effectiveness. Emotional Quotient (EQ) is now better understood and it’s being managed and exploited. EQ describes the way you monitor your emotions and the emotions of your colleagues, as well as how customers react in response to your brand messages. EQ extends through your recruitment, staff management and how you are able to manage consumer loyalty.
To build a sustainable brand position, your launch planning must be part of the innovation process and persona development at the earliest possible time.
The room44 Innovation Process takes EQ into account. Let’s talk about this complex part of your plan. You can book some time here to talk.
Ages of population – here’s how the ages of the various generations are described.
Your customer personas need to anticipate how the ages of your shoppers are shifting. It’s thought that 75% of the workforce in 2025 could be Millennials.
People who sit in Gen Z and Alpha will live well beyond 100 and have plenty of time for several discrete careers. What does this mean? Well, one theory is that Gen Zs are already approaching an age when their first business sectors are changing enough that they need to retrain.
Law – the legal systems we abide by have been developed over hundreds of years. Prevailing laws are the compound product of ideas and reactions to societal developments that have taken place over time.
History tells us that legislators are slow to evolve laws to meet a new situation, and yet the forecasted rate of change in many areas of our lives means that the legal system must accelerate to keep up. Laws rely on precedent to direct us, but technology is applying pressure here. Financial management, online business, digital fraud, autonomous vehicles, geographic and geo-fenced boundaries, artificial and human intelligence are a few examples of the areas where the law is evolving, but may need to anticipate what’s coming rather than react to what has happened.
These mega trends are just some of those that sit on the horizon. They’re already in play and will cascade to affect your customers’ choices, your brand positioning and your relationship with your buyers.
room44 watches trends, builds systems for our clients to watch for themselves and trains teams to innovate by being aware and informed about the way their markets are changing – before the change arrives.
We can help with that. Call us to find out more: +44 208 144 9800 or click through to see how our outside insight service works. Don’t worry, there isn’t another form to fill in.
Future thinking. Future-proofing. It’s what we do.
There’s a feeling among company managers that external perspectives can’t add much to business strategy. It’s an opinion we hear fairly often and yet, McKinsey seems to be doing OK. Is this because buyers of management consultancy just want to buy in resource to get a job done, or because an external perspective adds value?
Let’s look at a case study.
In the UK, Europe and the USA, the car market is changing. Not so much that existing suppliers to car brands can’t survive, but enough to suggest that, in many cases, their days are numbered.
This diagram paints the picture.
The bottom triangle shows where established business is today. The top one shows how insurgent and disruptive business sees its opportunity.
With legislation telling us that the only cars available in twenty years will be full electric, where do you think your business sits in the diagram above?
Let’s look a bit closer at this market.
In 2018, the EU car market grew by 0.5% – good news. Nothing to worry about there. Plug this number into your financial plan and it’s going to be a good year. Launch a new car every five years, let the supply chain develop components to meet the need. Everybody wins.
Oh, but wait, Uber has signalled that consumers don’t need to own a car to navigate a city. In London alone, that’s over 10 million people who rarely need to buy into this sector.
How about driving autonomy? Not going to happen?
Tesla disagrees. Toyota has invested $500 million in Uber self-driving technology projects. Google has invested over $1billion already. Since 2015, Dyson has been pumping $2.5billion a year into electric vehicles with some self-driving ability, and its recently announced move to Singapore puts the company close to the fastest-growing electric vehicle (EV) market – China. Coincidence?
One of the issues that EVs must resolve is range. Range correlates to weight, so EVs are built to be light. Cars designed for short trips come in under 450KGs, compared to over a metric tonne for cars made of metal. Where the language of car makers used to be of smelting, tensile strengths, rolling, beating, pressing and casting, now we hear of moulding, laminating, bonding, extruding and injecting.
There are other factors to consider in the car market. Hydrogen could utilise the infrastructure of filling stations the world over, if safe movement of the fuel can be assured. Environmentally, hydrogen has its fans and does present a viable alternative to electricity, avoiding the need for the creation of a charging system for EVs.
Supply chains change.
If you are part of the supply chain to the automotive market, or active in the maintenance of cars as they exist today, you can be certain that your world is changing. You just may not have seen it yet.
So, does an external perspective look like it could be valuable? Whether you make toothpaste (plastic packaging), potato crisps (metallised lamination and gas flushing), processed meat (veganism), or fashion (slow fashion, circular economy), things are changing for you.
Buying in an objective view of your market opens the door to fresh ideas. There is value in re-examining data that you’ve discounted, and in bringing your consumer’s perspective into your reckoning.
This link will download our free guide, ‘Seeing it differently.’ room44 specialises in delivering value from Design Thinking – the act of building a strategy from your customer’s perspective. A strategy that meets a need today and anticipates what you must do to stay relevant as your market changes around you.
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Future thinking. Future-proofing. It’s what we do.
In helping clients to see their business from the perspective of their customers, we hit a challenge: what to call this work? It’s easy to be confused by innovation.
After years of calling it Design Thinking, but having to explain what that means every time we say it, some bright spark came up with Human-Centred Design. Is that different, or the same thing?
At about the time this happened, your Human Resources department probably started saying things like ‘solutionise’ and talked about being in ‘human capital management’ or ‘human relations’. What’s with the ‘human’ fixation at the moment?
Here’s the crux of the issue
People who run businesses are beginning to realise that they don’t sell a product in isolation. They now know that they solve a problem for somebody else.
Want some software? Buy it as a service. Want a car? Lease it. Want accommodation in a city? Short-term rent it.
In a really short period of time, these solutions have become the drivers of product and service usage, because we no longer want to buy software, buy cars, or rent in six-month blocks of time. Product solutions now make it easier for customers to access services and products without taking on the responsibility of ownership or paying a premium over and above the value.
Innovation as a service
These new ways of engaging with brands are not exclusive yet. There are still many brands out there who don’t subscribe to the idea that they exist to serve you. Some brands still think it’s OK to sell you a subscription and hope you forget about it, so they can keep charging your debit card every month for a service you don’t use. Try booking onto a class at your membership gym in January and see how many times you get to go. See how far you get asking for a refund on that month’s payment. Just saying.
About being ‘human-centred’
Frankly, you can call your departments whatever you like. It doesn’t matter to your customers. What they want is to see that you have taken time to understand their issue and have designed a solution – for them. Walk into a room with the answer your client is looking for and you can call yourself King Pooba of Love if you want to.
So, is innovation confusing? Yes – but only until you work out what it is and who it’s for. And only until you realise that if you aren’t doing it for your clients right now, somebody else is about to.
If you haven’t heard of cross platform Apps until now and don’t see a connection with your market, it doesn’t mean something isn’t happening. It just means you haven’t seen it yet. We can change that and put you in a competitively stronger position. It starts with a call or an e-mail to us. Click here and most of the work is done for you.
What haven’t you seen yet?
When the iPhone launched, a decade ago, we all swooned over the colour-coded SMS trail. How much more creative could we expect a single brand to get? Surely Apple had reached its pinnacle.
Then Apple launched the App Store. Three short years later, iPhones made sense and the cost of buying software fell through the floor. Great news for us, even if it was a bit hard to comprehend at the time.
Since then, we’ve become conditioned to being diverted to App stores. Every one we download comes from a central iOS or Android store, and we navigate the journey like pros. But things are changing, and the redirection soon won’t be necessary.
The App Store is not an ’appy place
Cross platform Apps are already out there and growing in popularity. Across Android and Apple stores, you can choose from over four million (4,000,000) Apps today. Lots of them are duplications across platforms, but the next big shift in App usage is for them to be developed as a single product to run across platforms. It makes sense. Brands are already pushing them out to users without us needing to go to an App store.
As users, we may not see a huge difference. One less click in the UX maybe. But to the brand – no need to distribute through another channel, personal data collected directly, always on.
Cross platform Apps have access to all the bits of your operating system they need, like its camera and address book. Importantly, these apps can be used offline. For brands, this is great news. The way these Apps are built allows them to see your activity in a way that doesn’t intrude into your daily user behaviour. To the App Stores, it’s a problem: lost traffic, lost revenue, lost data – now we’re getting to the nub of the issue.
Off on a tangent (stay with me):
In other blogs, I’ve written about the serious impact electric vehicles will have on the sales of products that consumers (you) regularly buy from petrol stations – which seems obvious when you think about it. Now we see brands developing the opportunity to suck up your digital dust. These are connected concepts.
There are also efforts being made by larger brand owners (Unilever, Mars…) to deal directly with consumers and cut out the retail step in the consumer journey.
These are all signals of a trend that recognises the importance of knowing who your consumers are, how they behave, being able to anticipate when things need to be replenished, and knowing the most efficient way to get your product into their shopping baskets. From a consumer perspective, until the backlash happens and some of us decide we don’t want to give up our data quite so easily, this trend is developing in the background.
Apps for digital natives
When your kids get to market, because they are digitally native and, more importantly, have zero experience of analogue habits, these trends are showing us how they will shop.
Following this line of thinking, we can see how distribution channels may be reorganised. Whether bricks and mortar outlets will feature as much in our shopping habits as they do today is questionable. Whether wholesale and cash & carry outlets can maintain their foothold in this newly organised market is doubtful. Do they have time to do something to underpin their business in the face of trends that are gradually pushing them into obscurity? Of course they do. Will they? Are they? Not obviously, and not fast enough.
The signs are that…
Not enough of the people involved in traditional distribution are looking to their futures. As a result, unforeseen things will happen to them. But ‘unforeseen’ only because they aren’t looking, or choose not to believe what they see, or just can’t figure out what to do about the threat.
It’s fair enough to go along to an industry’s annual ball and pick up an award based on what you did in 2018. The trouble is, this isn’t where the battle is being fought.
Food distribution, technology, clothing, leisure, healthcare, pharmaceuticals, cars/mobility, retail… even culture and now Apps themselves are product and experience areas that are being differently managed as digital innovation. This not only presents new ideas, but changes whole industry sectors.
Our answer? Well, you can wait for the future to happen to you, or you can copy Jack Reacher: “hope for the best, plan for the worst.”
Randomly connected observations present opportunity
If seemingly unconnected signals like this are new to you, if you don’t see the connection between apparently random events and your market, or if you want to find an opportunity in this (and they are certainly there), get in touch.
Change of this kind is both a threat and an opportunity, depending on what you do next.
- Knowing where to look for the signals is a skill.
- Being able to believe the data is a skill.
- Being able to see useable connections is a skill.
Doing any of these things will be the difference in your surviving industry change, or not; in waiting to lose orders to insurgent competition, or creating an opportunity for yourself; in being resurgent, pushing back and making the best of the tools you have at your disposal.
If you haven’t heard of cross platform Apps until now, if you don’t see a connection between your market and what is happening around you, it doesn’t mean it isn’t happening. It just means you haven’t seen it yet. We can change that and put you in a competitively stronger position.
It starts with a call or an e-mail to us, but you have to do that for yourself.
Click here and most of the work is done for you. Or call me. I look forward to talking. +44 (0) 208 144 9800
Future thinking. Future-proofing. It’s what we do.
The digital dust that brands give off every day, both as individuals and as businesses, may create an illusion of what’s on offer. The trouble is, there’s so much floating around, it’s difficult to get your particular dust in the eyes of your prospects.
So, prospective clients look for case studies. In B2B, this has become the low bar validation of a business’s credibility.
Social isn’t as social anymore
Have you noticed how some of your friends are not posting on Facebook as often as they used to? They might be reading the news on Twitter, but tweeting? Not so much.
This trend is being exploited by some clever brands. When they have something to say (sell), they’re everywhere. Otherwise, it’s hard to find them. Exclusivity in being absent.
Similarly, if you’re not looking on Instagram, you probably won’t see your teenage family or friends, and you won’t get to join the chat anyway, because WhatsApp, Messenger and Slack are the places to go for that – by invitation.
On the other hand, have you noticed a decline in advertising by the mass brands you follow? Probably not. Brands are so desperate to tell you how great they are that social platform revenues from advertising are still doing OK.
The ‘by invitation’ nuance is something to watch.
Gaining access to a private conversation is now a ‘must have’ in premium marketing. Being on the inside of a group shows that you are ‘one of us’ and gives you a pleasing exclusivity.
Exclusivity equals scarcity, which equals premium. If a consumer can get a social edge by being the first or the only one to have a new thing, they’ll be happy to pay for the privilege.
Where do you see these trends?
To see new trends before they really emerge, have a look at Instagram and Pinterest, go and see the new media being launched (like this one) – the disruptors are there and the things they’re spotlighting will soon be sought after.
It doesn’t matter if you want to play in a fashion market, fruit and veg, automotive or even to see where people’s heads are at in plastics recycling, online is still the cheapest place to find the new ideas if you believe your own curiosity and intuition. For more free detail, go to the latest news outlets. It’s all there for you to explore.
So, where to look isn’t new, of course. But what’s out there is new to to the new audience, where the norm is for everyone to have access to everything, all the time.
And here’s why exclusivity is back: ‘always on’ is beginning to look a bit old. In fact, if you aren’t always on, where are you? Intrigue and brand-scarcity works if you can monetise exclusivity.
Back to case studies and digital dust.
Publishing details about the good stuff your company has done has become the basis of qualifying value propositions across markets.
Look at every website on the internet, and if a company has been there for more than five minutes it will have an ego wall of customer brand logos and a case study behind each one.
But what of the site that shows logos and no case study? What of the company that doesn’t show any clues about their track record? The question is moving from ‘well, if there’s no case study, did they really do that work?’ to ‘if there’s no case study, maybe we should talk to them to see what they delivered.’
Intrigue sells. It always has. The reason is that a buyer has to work for the benefit they perceive in the relationship. Show everything up front and the decision to talk or not is binary: yes or no? Show a bit of what’s on offer, and a conversation has to start before anything else can happen.
Talk to us and you’ll find that whether we say it in a case study or not, the good work goes on in FMCG, pharma, culture, VMS, personal mobility/EVs, law, accountancy… we’re hard at work in and on all of these sectors.
It can be difficult to go into too much detail about our work, but you know what? Intrigue and exclusivity is what the clever brands are doing.
Want to know what we’re up to? You’ll have to email me to find out.
Click here and most of the hard work is done for you.
Seeing it differently. Future-proofing. It’s what we do.
My dad broke his back in a motorcycle crash. It was a time when spinal injuries weren’t well understood and he didn’t walk again. He was nineteen.
In those post-war years, being a paraplegic put some pressure on your job prospects. It took three years to get my dad into a wheelchair and then home. For most of that time, he lay on his back and had few visitors.
Cause and effect.
One person who did visit was the chap who was riding pillion at the time of the crash. He came to see if my dad’s insurance would cover the cost of a new suit (the suit he was wearing had been torn when my dad broke his back). No-one seemed to think it remarkable that this guy had been the pillion rider in previous bike crashes. Unrecognised cause and effect?
Being from a farming family, when Dad was lying in hospital it relieved the family of the need to feed him. When he went home, he was a burden. He got a disabled carriage: one of those small, single-seater, single-cylinder cars with handlebars instead of a steering wheel, and started selling different grades of oil to farmers, displayed in Kilner Jars so they could see the colour difference and know which oil was better for their tractor or rotovator. Not a common job these days.
You can’t buy more time.
Eventually, Dad trained as a watchmaker and found his groove. For over sixty years, he repaired watches. He fixed clocks too, and old clocks became his speciality. Those rickety old timepieces that were never really destined to keep good time, but which did a better job when he’d replaced their steel bearings with brass or jewels. Engineering that did a good enough job when timekeeping was more of an approximation than a science.
When man made it to the moon, watches became electronic, so Dad learnt to fix them as far as he could. When quartz watches launched, he decided he was not going to try: the technology is disposable, and the chips too small and cheap to try and fix. Even in the old days, there were companies that only made movements, and they supplied the same workings to all brands.
My dad made a good living from watches and clocks. He sold some, he fixed some, and he got paid what the service was worth. Because everyone knew what an alarm clock, or a Timex or a Rolex, cost, there was a limit to what he could charge for these repairs. But because no-one could put a price on an antique grandfather clock, or a Fusée movement, he charged what the customer would pay: value-based pricing in the service sector.
Over time, my dad became the only watchmaker in town. He outlived the others, or just kept working when they retired. Being in a wheelchair meant he couldn’t take up golf or sailing, so he did what he did. We never played football together, but we did go fishing. There were pastimes that he could apply some logic to – use his engineer’s mind.
To be in an industry that’s showing signs of changing in ways that you can’t see is not unusual.
As time went on, though, the price Dad could charge for repairing a clock became a matter of intense negotiation on every job. Whether the clock’s timekeeping was accurate was usually not a question: it was its status as a heritage piece, with an emotional value for the customer, that dictated what they’d pay to see it working again.
Gradually, the value of his work dropped. The quality was still as high – sixty years of knowledge and practice was hard learnt. But, whether you pay £5 or £50,000 for a watch, you can’t buy more time and can’t buy accuracy that makes that much difference. Watches and clocks now hold a different place in our value eco-system. Phones, screens and cars tell us what we need to know.
The old master made enough to live off by being good at what he did, but the market moved on. We all forgot about watchmakers – most of us are unlikely ever to need one.
This story is one that you can track through time and industry sectors right across the consumer product and medical landscape. Things that mattered to our parents and their parents simply don’t matter to us. Technologies that have come and gone are easy to list as far back as you can remember. My dad didn’t have a strategy: he had a skill that fell out of favour. Everything does eventually.
To be in an industry that’s showing signs of changing in ways that you can’t see is not unusual. Your time will come: that’s why we do what we do.
We help you to see how the trends developing around you will impact on your revenue line, and we work with you to develop a plan that underpins your continued business success.
Innovation isn’t an option.
Innovation isn’t an option, it’s an imperative. Unless you are planning to play golf or go fishing, and that isn’t really much of a plan.
Seeing it differently. Future-proofing. It’s what we do.
Is company culture the problem that innovators struggle with, or is it trying to make innovation as interesting as profit?
Or maybe it’s you. If you’re getting in your own way because you are busy, stop. Your culture won’t change until you do.
In the business news last week: Premier Foods CEO Gavin Darby, Iain Ferguson at the Stobart Group, and Sir Charles Dunstone at TalkTalk are all under fire. Aveva is being pressured to reduce remuneration packages for executives.
Meanwhile, Trump’s getting ready to take on the WTO, while locking horns with the EU and China. The effects of US trade tariffs are already being felt. Harley Davidson is considering moving production out of the US to avoid raw material price increases. Where will they go? China, the EU, Mexico? They’re all in the WTO.
Does any of this affect you? How about this…
When the 1990s dotcom bubble burst, many investors in new businesses lost money, and companies who rode the first wave of digital tech vanished. As a business in that market, you might not have been able to do much to protect yourself from its collapse. But perhaps you could have thought twice about overextending your loans, or growing more quickly than was expedient. In other words, you could have taken note of the indicators around you and drawn your own conclusions.
The likely truth about the dotcom problem twenty years ago is that technology wasn’t as embedded in our lives as it is today: it was an added-value extra that we could survive without. Now it’s a different story. Technology is not only embedded, but essential to the way we live and trade.
You may be anticipating the day that AI stomps over the horizon and marches into your IT department: don’t. Everything you do is already augmented by technology and the machines are learning you so effectively that ‘augmentation’ will soon be the driver, rather than the occasional navigator. AI is here and it’s stealthily mixing with what we do.
And so to culture: established companies up and down the land (any land) are looking to buy adjacent opportunities (businesses that sit just outside their core business functions, that will help grow them vertically into a market). They’re behaving in a relatively traditional way. Consequently, their board members suffer when shareholders realise that just doing a deal isn’t the best return on investment any more. When the CEO gets it wrong, there’s a price to pay. This may be part of the problem at Premier Foods, where a competitive takeover was rejected but the share price hasn’t reached the offered value through organic growth.
I’ll try again: culture. Companies like Premier Foods and Stobart have eye-watering overheads. They have to pay thousands of people every month. So, their ability to fund innovation is limited, despite the assumption that they should be able to afford it. If you are a manager with a budget and a growth/cost reduction target to hit, what do you do: pay a team to ‘innovate’ with an uncertain outcome, or look for efficiencies, or an easy-to-deliver range addition?
On the other hand, companies like Uber have a relatively low wage bill and can pivot whenever the market asks them to.
If investment is a significant limiting factor when your company starts to think about preparing for the future, this is where to start – behave like you don’t need it.
Established business is so lucky in the context of innovation. It has revenue, customers, distribution, supply chain, market knowledge, data sources, access to feedback from live consumers, brand presence and, dare I say it, profit. All the things that start-ups don’t have.
So, what’s getting in the way of you innovating?
Maybe it’s you. If you’re getting in your own way because you are busy, stop. Your culture won’t change until you give it a reason to. Organise as many away days as you like: if you let people go back to what they did before the meeting, you’ve wasted your time.
There’s a process that can help you and it’s available for a modest investment of time and money. It will break down your team’s resistance to changing their perspective on what they do. It will offer all of you a new vision of what must happen next.
It will give you the tools to decide what your eventual plan looks like, so you know you’re in the best place to return a profit as your market changes.
Seeing it differently. Future-proofing. It’s what we do.
Every single market has a forum, a conference and a series of businesses running ‘global’ events in that subject. The conference trade booms every time a new industry problem arises.
Take this one: Customer Experience Management (CEM). CEM is that thing you suffer when you call a company and get routed to a resource that provides an answer to your question.
Industries that use CEM technology tend to do so because they receive such huge volumes of consumer traffic that it’s inefficient and expensive to handle all calls with a person. So you are routed, and talked to by bots, and deferred until there is no option but to talk to you.
I’m not passing comment on this, just saying it’s out there and that, maybe, the insight delivered by real consumer contact could be used to resolve frequently occurring issues. It’s not a subject I’ve heard discussed at CEM conferences: dealing with the cause of an issue isn’t as exciting as investing in AI to juggle the call volume.
Anyway, the activity of listening to companies and consumers separately is endlessly fascinating. Listening to brands that sell through retail and to companies involved in automotive technology has proved to be a similar experience.
Retail is under threat. UK news feeds this week feature ToysRUs and Prezzo about to close @200 stores between them. Toys and eating out: low cost desirables, and sectors you might have expected to offer more security. We’ve also commented on the trend for AirBnB-type companies making unused high street retail accommodation available on a day-by-day basis. Seeing a trend yet?
Whichever way you cut it, and even ignoring Amazon Go and reports like ‘The Digital Shop of The Future’, it’s hard to deny that the landscape is changing. In my small market town this month we‘ve seen a butcher’s shop, established 100 years ago, close down, and two more barbers set up shop. We’re up to six now, plus unisex salons and ladies’ hairdressers. Product-based offerings losing ground to services. I don’t think we’re unusual.
So to automotive development. I’m lucky enough to live close to the world-famous Silverstone racing circuit. On its doorstep is a technology park, where very clever people work very fast to make things to service that industry. Some of the components they make as development ideas for F1 and other race series, like Formula E, will eventually filter into mainstream production.
The current hot topic is electric vehicles (EVs) and the effect on the internal combustion engine (ICE). In a nutshell, if the UK government follows current policy, the market for new ICE-driven vehicles is in terminal decline, and EVs are in the ascendance. Of course, there won’t be a sudden switch from one to the other. Over time, the market will taper out of the old technology into the new.
As a component supplier to the car industry, unless you are rooted in heritage vehicles, your market is contracting. You may not have felt it yet, but that’s your new reality. Think of it like the comfortably numb lull between interest rates going up and the first higher mortgage payment.
All those EVs, some running around autonomously. Less demand for car parking and lower still for fuel stations. Charge points will be in high demand, but we may enjoy fast charging one day.
What we do know is that there hasn’t been a fuel station yet that has been converted into a new use that doesn’t still look like a converted fuel station. What will they be?
What will the oil companies do with all that real estate? Who will be our convenience outlet for groceries, confectionery, cheap flowers and barbecue charcoal? The high street perhaps? But what will the guys who make antifreeze do? Who’ll need engine oil? If cars are autonomous, will we even need screen wash?
With all this in a 15-year horizon, it’s the graduates learning to be design engineers now who are working it out.
The tapering out of the current supply chain has begun. Companies that fit out forecourts, make carburettors, produce lubricants, cast engine blocks, extrude fan belts, machine, grind, re-seat, and so on are in trouble – unless they’ve run scenario planning exercises and have an innovation strategy in place.
When you supply a service to a tech sector, it’s always worth looking ahead to see what’s coming; to know what you can do now to future-proof yourself. Whether you get it right or wrong, changes can be made, but it’s better to be roughly right than have no idea at all.
One last question: where will I be able to buy a Snickers and a pork pie without my wife knowing?
Future thinking. Future proofing. It’s what we do.
Not a day passes without innovation making the news. The data collected from the constant monitoring of our behaviours is mostly seen as a poorly-defined threat that the machines will use against us. Scenario planning at its worst. Future forecasting at its most confusing. So where do you start with business innovation?
It’s obviously true that information is being gathered. Your smart watch, smartphone, laptop and iPad are all emitting data dust that’s being sucked into a cloud and aggregated into a cognitive system that is learning your behaviours. Every traffic surveillance camera, parking space sensor, medical device, call-handling system and checkout you use records your habits, predispositions, dislikes and preferences.
But information is ephemeral. Only when it is stored and valued, does it become data that can be analysed, and you effectively gave up caring who gathers information the first time you signed up for a digital service. The trouble is that the data isn’t equally distributed. Yeah, Amazon knows you better than your mother, but who else?
Business and innovation today craves to be new, newer, newest. Be the first and occupy a white space before the upstart does. While media are fixated on the far future as a problem, brand and product managers get on with making things we can buy today and tomorrow. The two ends of the timeline are connected in some companies and not in others. Lots of others.
Selecting the best data source for you is a real conundrum. Our top tip for seeing what your product could look like next is: look back as well as forward. And here’s the hard bit. Looking back from your future market position demands that you know a few things.
You need to know your customer (People), what you are going to sell them (Product) and when (Place), and this starts to shine a light on the financials (Price/Promotion). Decide these things and suddenly you know everything there is to know. It’s like having hindsight. It’s when the ‘Ah Ha’ moment happens.
In your hard drives, there is market and client data that would be of such high value and specificity that to commission it anew would cost far too much. Your earlier market reports, consumer profiles, product ideation notes, team meeting minutes, even the pitch documents you’ve got on file from prospective vendors are tailored to you. Look at this data in the right way and it reveals loads of good stuff: not least, what you know about the way your market is developing and how your customers will respond.
Dig this data out and someone will say, “FFS, why didn’t we do that sooner?”
The new ways to create value from your idea rely on how the thinking process is stimulated. As my mum used to say, “look home before you look away.”
Future thinking. Future proofing. It’s what we do.