Innovation and the brand
Innovation has become a buzzword. Use of the word is normally associated with devices. A quick scan of the international business press will show that major brands can have major impacts on global bourses. The cache status of the brands makes innovation desirable.
What is often overlooked in the rush to buy is that the perception of innovation vests with a very small number of companies, and that these companies are recycling old ideas, such as the wristwatch and resizing the phablet (phone tablet) in numerous sizes.
What’s ahead? Google glasses, probably the most notable innovation, have yet to reach maturity. The next iteration of that appears to be applications for the contact lens. There is also the possibility of the modular device.
Many brands profit on the back of these innovations, by mimicking. Other companies rise and fall on the hopes of introducing innovations which are ultimately not adopted by the market. The difficulty lies not only in finding an innovation that sparks the imagination of the market, but that also does not sink the company or damage it with expenses and disruptive management.
The primary risk of innovation is internal. The company sees the innovation as something entirely new or a reinvention. Presented with a glimmer of an innovation, the company may choose to throw a disproportionate amount of resources from development through to launch.
The process entails redirection of resources from existing lines of business that are currently profitable in the first place. If that redirection doesn’t produce a result, the resource has been wasted and the company has taken a step back. In order for a company to make a foray into the realm of innovation it must have resources over and above what it requires to sustain its current operations.
The launch and post launch phases must also be handled extremely carefully. Among all the excitement of the impending launch, many people forget that products have a notional life-cycle. At the beginning of the product life-cycle the product or service is first picked up by early adopters.
Many companies ignore this early stage of the life-cycle and stretch their marketing budget to reach the widest possible target market, instead of focusing on the early adopters. This is not only a cost but also a waste of effort. If the early adopter segment is identified and handle correctly, they can become the thrust of marketing. The key characteristic of an early adopter is that he or she will influence future users to follow his or her example, and this must be put to use.
For an example of how this works, consider the case of Google Glasses. A very small number of the headsets were made available to individuals who had to apply in advance. These pilot early adopters were selected on the basis of their reach through blogging. With very little fanfare, or budget, Google was able to create a huge amount of awareness of the product on a global scale. Not only did Google generate the awareness, but it also limited its marketing risk.
There is a simple set of principles to guide innovation. Firstly, the process should be a team exercise so that no one person becomes so enamoured of the exercise that he or she loses perspective. Secondly, the expectations of the innovation must be stated clearly, and these should be tested in research. Thirdly, progress of the innovation must be monitored before after launch against reasonable milestones so that the initiative can be halted if it flags to conserve the organisation’s resources.
Conversely, innovation must never be undertaken for the sake of innovation. Businesses often use innovation as a means to refresh themselves. But the burst of vision is a risk. Most businesses will have a track record of failed innovation in the form of abandoned products and services. It is natural to the process of evolution of the business and brand. However following these simple guidelines will reduce the risks.