A friend shared with me a wonderful resource on business innovation over on the Visual Capitalist website. I’ve share links to the original source at the bottom of this post, and a number of other valuable resources that can help with business innovation.
I remember a lesson from my MBA. “…to remain profitable in the long term, your products must remain different over the long term.”
Warren Buffett and “Big Moats”
Warren Buffett talks about businesses with “big moats”. A big moat for a medieval castle kept the attackers from reaching the castle walls. A big moat for a business means that competition finds it difficult to offer a similar value proposition at a similar price point. If your product or service is not different from the competition, you have no moat.
In today’s open society, outside of state regulated monopolies, the only long term source of differentiation is innovation. Where does innovation come from? How can a company think about the different directions to innovate their product offering?
The 10 types of business product innovation:
#
Innovation Type
Description
1.
Profit Model
How you make money
2.
Network
Connections with others to create value
3.
Structure
Alignment of your talent and assets
4.
Process
Signature of superior methods for doing your work
5.
Product Performance
Distinguishing features and functionality
6.
Product System
Complementary products and services
7.
Service
Support and enhancements that surround your offerings
8.
Channel
How your offerings are delivered to customers and users
9.
Brand
Representation of your offerings and business
10.
Customer Engagement
Distinctive interactions you foster
Innovation Tactics: 100 approaches to Identify Innovation
One useful resource is Doblin’s (part of Deloitte) list of over 100 tactics (pdf) that correspond with 10 Innovation Types framework.
Further Reading on Business Innovation
The original Visual Capitalist post is very much worth a read… and provides much more depth on each of the 10 types of business innovation:
Mark Fritz is a regular Vistage speaker who is on a mission to end micromanagement around the world. He is passionate about helping leaders create highly engaged organisations where every employee treats the business as if it were their own.
One of my favourite examples from Mark is his question: “why does nobody ever wash a rental car?”
Why Does Nobody Ever Wash a Rental Car?
Have you ever washed a rental car? No. It is not your car. You give it back covered in muck and full of litter. It’s not your problem. Its someone else’s car. It got you from A to B.
Many people treat their work like a rental car. Do your employees treat your business like it is their rental car, or do they take care of it as if it were their own vehicle?
Leaders must be great at 3 things to create Success…
The 3 Necessary Conditions for the Success of your Organisation
Clarity – when things are clear, you take more action. When things are clear, everybody takes more action.
People – it is not your people that are your most important asset, it is your people pipeline. How are you developing the next generation of people? If you are not developing people to replace your current leaders, your current leaders can’t grow into their next roles.
Influencing Skills – if your people can’t influence someone else on the team, where do they come to get help? to you. If your people can’t influence, they depend too much on you.
As a leader who really wants everyone to grow around you, you need to help people around you develop two abilities:
Business Judgement
Influencing Skills
Check out Mark’s short video from a recent Vistage open day in the UK:
I am biased. I believe business schools are excellent at developing business judgement. During the 19 months of my MBA program at IESE Business School, I worked through 650 cases. Each case is a business decision. Each case requires some individual work to practice your own ability to focus on what is important and develop a plan. Each case then requires that you work with a small team to influence them about your plan, and to allow your ideas to be tested and changed by their influence. Each case then requires that you enter a classroom with an excellent teacher who will take the discussion even deeper. There is no better way to develop general business judgement than in the business school environment.
Learning to Influence
I have a vested interest in this. I have taught over 44,000 business leaders, MBAs and political leaders to Speak more Powerfully – specifically to Move People to Action. I would suggest you begin by taking my Speaking as a Leader online course (currently free). You can also watch the playlist on my Youtube channel (over 70K subscribers) called Develop Your Speaking Skills.
I was in Belfast this week to celebrate my father’s birthday and spend some time with our relations in the north of Ireland.
My great uncle Jim is 94 years old. He has always been a great teller of stories. This is a story I remember hearing from Jim years ago. It is about why a barber shop thrived in a street where several brand name hairdressers had been unable to survive.
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