Have you ever noticed that the type of business that McDonald’s and low cost airlines, like Ryanair, carry out is quite similar?
Both of them approach a wide-ranging group of population with a medium-low income (fact that doesn´t prevent the occasional use of these services by people with higher rate income), to whom they offer very low prices, quick service and similar premises (venues or aircrafts), that are clean and well- recognized and that customers find “familiar”.
The issue with McDonald’s (their results are not as good as they used to be), is that maybe they haven’t tried hard enough when they offered these low prices as these provide pretty unhealthy food for their consumers. As they become more and more conscious of the need for healthy food, consumers are turning the back on this company (aside: I have always thought there is a great chance of innovation in selling food as the one McDonald’s offers but perfectly healthy, even functional, why not?).
We were discussing unhealthy food, and this is something, being harmful, that for obvious reasons low cost airlines cannot allow themselves doing. In the commercial flights business, being unsafe means nothing less but taking people’s life as this is directly related to safety requirements. Luckily they haven’t failed there (if they ever fail they will end up dead, a lot worse that Mc Donalds).
Returning to the similarities, we notice that business models that work in a specific area can be perfectly valid or even innovative for other completely different ones: in this case, fast food and commercial flights.
This fact applies to all kind of businesses including the B2B (business to business): the car rental has opened a way to the computers’ and IT´s equipment. Why not relate it to productive machinery? We are almost there if not starting already.
Recreate successful cases
The intention of this post is to show that a very interesting way to create innovative ideas is to transfer innovation that worked in a different field from ours. We have anticipated something similar – working on consumer trends – in a previous post.
It is what I call “push” innovations as we push the innovation into the market at our own initiative. These are not the result of demands or unmet needs of our market’s consumers.
If it worked for a different field, it could also work for ours. Couldn´t it? We will see that, if specific circumstances are given, there is a great chance of achieving that.
The three axes innovation method we suggest is similar to the analogies creativity technique.
The analogies technique works in the following way: we randomly choose an object, like a hammer for example, and we describe something that characterizes it, like hardness, simplicity, versatility, simple use… In a later step, we take these basic characteristics and apply them to our focus: the problem we need solving or the product we want to transform. This is a way of creating innovative ideas. Valid ideas or not, we´ll realize that later on.
What we are suggesting is a method for which we don´t take any randomly chosen object, but innovations that have already been successful in other industries.
For instance, among recent successful innovations we could examine the platform of housing accommodation like Airbnb or the awarded and admired electric car, Tesla. Or, for example, the crowdfunding platform Kickstarter, the 3D printers, the drones or the incredibly cheap single-board computer Raspberry Pi.
Looking back at not so recent cases but still interesting, we have Google, Facebook, Amazon, iTunes, Twitter, Nintendo Wii, Cirque du Soleil, Spotify or El Bulli.
I call this working method, using analogies of successful improvements, the three axes innovation. We will see why further on.
Three axes innovation method
My hypothesis is that if we take the right steps, we can improve our chances of being successful when implementing these innovations that we are developing, basing ourselves on the fact that it has already worked with great achievements in different industries.
It´s only 4 steps that we can see in the following graphic.
Step One: sectors for innovation
The first step is to identify similar industries to ours. By similar, I mean similar customers with resembling profile and related needs. Customers that, when purchasing the services or products of that industry, they do it for similar reasons to our customers, in our own industry, when they buy our product or service. Both groups of clients meet resembling needs or desires: convenience, performance, safety, image, reputation, etc.
If in our sector, we work with products that imply a purchase of high involvement, for example vehicles that require a considerable evaluation and reflection, we should not look into sectors where products are bought by impulse, almost without thinking, like batteries or chewing gums. It will lead us to wrong conclusions and no valid links will be established.
The first step of choosing right the sectors is to secure a first valid link with our market, with its needs and problems. As we will work with practical solutions in similar base problems, with the same type of users, but in a different industry.
Step Two: identify “their” innovations
Once we have located these sectors that are similar to ours, the next step is to analyze them in detail in order to find out which innovations they introduced were more successful in the last years.
Step Three: extract the value dimensions
This is the most important step that we need to take: study the main innovations of each considered sector and identify its “dimensions”.
I sustain that an innovation contributes with its added value and distinctive value on two or three axes or value dimensions; generally, not more than that. Because as the always reliable Peter Drucker stated, in order for an innovation to be successful, it has to create only a few new things. Not many at a time, because then the focus is dispersed and it gets harder to be understood by its potential users (as it happened with Apple´s PDA Newton in the late 80’s).
If an innovation is too different of what we have today, and therefore of what is going to substitute, a too high barrier is raised for the customers to pass.
Think for example about the first automobiles: the innovation worked because the appearance suspiciously looked a lot like the one of the horse-drawn carriages. And that`s what they were, cars without horses! If these have looked like a Lamborghini Aventador it is very possible that these would have disappeared without a trace.
Interlude: plain or voluminous innovations
Successful innovations, by comparison, will have height, width and sometimes depth, as we can observe when drawing these value dimensions in a tridimensional space, with three axes: x, y, and z.
Let´s have a quick review of the Nest Labs case, the company bought by Google in January 2014, which has been able to develop the thermostat that will probably change the way and use of every single thermostat from now on.
One of the value dimensions of this thermostat is its appearance, its design. Another one is its easy and intuitive use; and another would be the global image of the brand, exceptionally cared for. These dimensions are curiously similar to Apple’s iPhone, right? An innovation success in a different industry pretty remote from thermostats industry. Could this have been their inspiration? I have no doubts at all.
We already mentioned Airbnb, the web site for housing rental. One of the dimensions of this platform is the lower price compared with accommodation alternatives (mainly hotels).
Another one is the variety of options, the availability offer for the user regarding dates, location and type of housing preference (let us imagine the seaside: the user can find an apartment by the beach, a luxurious villa with a swimming pool, a room in a closer village etc.).
A variety of options together with a rating system that allows the user to compare the quality of the service through the opinion of other users just like thermselves.
The third dimension for Airbnb could be the unusual and fun experience, the chance to meet new people, live in their house, discover the sites with local people that will allow us to access unique and not very touristy places as well as personalized recommendations of restaurants, pubs, etc.
This business is very similar to one whose main product has almost nothing in common with: Amazon, where one can buy books at a low price, with a huge variety of offers and a personalized experience, feature determined by ratings and recommendations of books of other readers and buyers with a similar profile to ours.
Step Four: a side step to our sector
What we do at the fourth step is “detach” or synthesize the basic dimensions of the analyzed innovations. In the Nest Labs case: design, image and easy use. In the Airbnb case: low cost, variety and extensive offer and experience.
What we need to do is relocate those dimensions to our industry and see what happens. We ask ourselves: what would happen if we apply these three dimensions to our sector? What will arise from this? Will it make sense? How can it look like?
If we want to take the side step with Airbnb`s dimensions and apply them to our industry (if supposedly at step one, we realized we are working in a sector with customers interrelated to Airbnb’s) we will have to ask ourselves: what happens if we apply low cost variety, an extensive offer and also personal and enlightening experience to our business area? How should the result look like in order to work? Can all this make sense?
Worth testing innovation recipes
This process has to be repeated several times, in sectors with similar issues or requirements to ours, so we end up with a range of pretty well defined innovation proposals (in the sense that the value dimensions are clearly stated).
It is a process that does not challenge or oppose at all the methods which focus the search of opportunities to innovate on the problems and dissatisfactions of the customers, of which we are tireless defenders. On the contrary, it is a complement that produces more creative solutions through alternative ways. And as we know, when we refer to creativity, quantity equals quality.
It is obvious that not all the side steps we take will be proven valid or will make sense, but I am convinced that it is still an effective method of discovering innovative and hopefully successful ideas. Because, using a culinary metaphor, it comes up with recipes that have already succeeded in other restaurants with a similar public to ours.
Disclaimer: This post was published on June 23, 2015 in Spanish on the blog “Innovación con los 5 sentidos” by Javier Sastre on the following link