Every so often a new technology comes along that promises to completely reshape an industry and we’re all told to quickly adapt, adapt, adapt.
In the case of digital technology more broadly, adaptation has been ongoing for many years now, yet many industries are still struggling to make sense of it all and truly make the all-important digital transformation. Adaptation, as it turns out, is quite hard.
According to recent research done by PA Consulting, 66% of executives surveyed confirm their organizations will not survive without innovation – but only 24% are fully confident they have defined the skills and activities they need to be innovative. Moreover, 50% do not believe their leaders fully display the vision and passion needed to make innovation happen. And despite the seismic changes of recent years – particularly in technology – 37% say their organization has made no, or only minimal, changes to its approach.
As Ted Schadler, VP and analyst at Forrester Research, put it in a recent Forbes article, “That it’s taking so long (with digital transformation) is just an indication of just how hard it is for companies to change how they operate. But hard does not mean impossible, and we think companies could exert a little more willpower using technology to do a better job for customers.”
At Experian Partner Solutions, we couldn’t agree more. Change is hard but doable, and the devil is in the details. So in the interest of flushing out those devilish details, we offer five questions to ask yourself before innovating.
1. Do you know what your customers want now?
This is obvious, but too many companies skip this step. Gathering consumer feedback is critical, yes, but it’s especially important during these inflection points where radical change is required. Are you harnessing the feedback you’re getting on the customer service side? Do you know how to harvest your data for key customer insights? Do you need a partner for that? Do you know what kind of partner? Is there budget?
2. Do you know what your customers need before they need it?
Steve Jobs famously said, “A lot of times, people don’t know what they want until you show it to them.” Discovering what that is, however, is easier said than done. It requires companies not only to view trends within the industry but also trends in other industries that they could repackage for their own.
One good example of this in the credit card industry is mid-tier travel credit cards beginning to offer an application fee credit for Global Entry or TSA Pre-Check. For a long time, this perk was reserved for premium credit cards with large annual fees. But by providing the benefit on a more affordable credit card, credit card issuers provide their customers with a solution to long airport wait lines that they may not have known about or considered out of reach.
3. How much emphasis does the leadership team put on innovation?
According to Skins executive chairman Jaimie Fuller, “You can have the greatest idea in the world, but if the person leading the company does not have the vision to see it, then it just is not going to happen.” If innovation is not high on their list of priorities, then change will be slow.
The important thing is that this concept of innovation needs to become part of the culture of the company. Hackathons, for example, are a staple in tech companies. These events began as a collaborative event for computer programmers, but can also become an opportunity for employees to develop new ideas to improve or add to your current product line, or provide a better service to your customers.
4. Do you have a clear purpose?
When Apple set out to build the iPod, Steve Jobs defined the purpose as, “1,000 songs in my pocket.” Not every purpose can be put that simply, but it’s a good goal to shoot for. Whatever purpose you do land on should map back to the goals of the company and align with where you see the industry going (or where you feel you can reasonably move the industry). It’s also important to ask how you see the product fitting in with all of the other company initiatives.
5. How will you define success?
As economist Peter Druker famously said, “If you can’t measure it, you can’t manage it.” Instead of focusing solely on the bottom line, also consider upfunnell measures that focus on customer satisfaction, retention, engagement, etc. Once you define your success measurements, you might be surprised how much they can inform the development process.
Oftentimes innovation is a process of experimentation and failure and it takes patience and discipline to turn failures into successes. Make sure you take the right lessons from each stage so that you’re keeping the smart thinking and tossing out only the thinking that’s causing the failures and you’re sure to land in a good place. Oftentimes this comes down to nurturing a culture of innovation.