business innovation

The Ten Commandments Of Business Innovation

The Ten Commandments Of Business Innovation
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Professor of Strategy and Entrepreneurship, London Business School
4 min read
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If you’re looking for ideas to reinvigorate your business –or even start a new venture- I would like to set you a challenge. Begin by picking one or two long-established practices -either within your own business, or a sector you know about- and review their purpose. This can be a very effective way to identify entrepreneurial opportunities.

And if you’re considering a sector where businesses are relatively undifferentiated, this approach can work particularly well. It’s all too easy to become blind to the negative effects of long-established practices, thinking, “that’s just the way it’s done,” when the original reason for a particular practice has long gone. So, don’t take things for granted. Look at the activities of some close competitors. To get you started, the ten-point plan below provides a practical framework. Pick one or two points, such as reverse benchmarking, and make a start.

If you’re checking established practices, be sure to understand exactly why firms are doing what they do. If no one quite understands the reason for a particular activity, this could provide an opportunity for differentiation and innovation.

Let’s take the example of broadsheet newspapers which circulated in the UK for so many years. Why were they printed on large sheets of flimsy paper when it was cumbersome for the reader, and more expensive than printing on smaller sheets? After some research, I discovered that the practice originated from 1712 when the English government started taxing newspaper companies based on the number of pages they printed. In consequence, newspaper publishing began printing on larger sheets of paper to manage their tax bill. This clearly shows why comparing yourself or your organization in terms of practices or performance, with a group of peers, and then potentially mimicking them, can be a recipe for poor performance.

So, I challenge you to seek out a source of innovation. Here are ten ways to help re-energize activities in your team, your business, or even to help identify a whole new venture.

1. Cut out the benchmarking as this can prevent innovation Comparing yourself with others, and following their approach without fully understanding their chosen path can perpetuate bad practices. (Remember the example of broadsheet newspapers in the UK.)

2. Try reverse benchmarking If there’s no clear reason why competitors or those in a particular sector are doing things the way they do, then try doing it differently.

3. Experiment if you can, but make sure to do it well Change one element at a time, and nothing else. That way, you should be able to distinguish the impact of what you are doing.

4. Monitor entrants and companies in distress New entrants who may be emboldened by little to lose or unshackled by old habits, along with organizations fighting for survival may be prepared to experiment with new ideas or dispense with old practices.

5. Ask insiders for concerns Your own staff understand the business and sector, so ask them for their views.

6. Ask outsiders and new staff for suspicions Individuals who may be unfamiliar with your organization’s practices may be more likely to question long-established practices. Talk to them, find out what practices they query and keep an open mind.

7. Create bundles of practices and a new business model Look for activities that fit together and you may be able to create a new niche business idea.

8. Take aim at a chunk of the market Identify a corner of the market where an industry’s long-standing conventions no longer meet the needs of that particular market. By targeting an under-served sector of the market may give you a new opportunity.

9. Just stop a business practice and focus on what’s really important. If most companies in an industry are offering something which customers don’t really want, you’ve probably discovered a bad practice which can be eliminated.

10. Watch out for “that’s the way we do things round here” If you hear people saying that, it means they can’t identify a particular reason for the behavior. In my view, it’s an instant clue that you may have found a bad habit that needs to stop.

Related: The Connoisseur: Gastronomica Founder And CEO Basil Al Salem

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