While inventing a brand new product has historically been the most influential factor separating successful from unsuccessful companies, innovation is quickly taking the reigns. The act of making changes to an established paradigm is arguably more important in the busy modern business landscape.
Based on data from two intriguing case studies, here are some tips and hints on how to create an innovative company.
Ask the Right Questions
The foundation of a truly innovative company is curiosity. Honest curiosity that stems farther than the surface-level questions — “How to increase sales?” or “What are the best marketing tactics?” — is often the catalyst for innovation.
Without sounding too cynical, asking the right questions begins with focusing on problems.
For companies like Salesforce, the problem was a lack of options in the way companies managed their customers. For streaming services like Netflix and Spotify, the problem lied in the exclusivity of media. Airbnb and Uber identified a problem in the distinction between company and customer, and found opportunities in democratizing services that were previously managed by a select few.
Leverage Big Data
In 2019, the companies whose problems and solutions are more rooted in big data are bound to be more successful than those operating on hypotheses. The capacity to quantify problems and their corresponding solutions has become invaluable in the space of modern business development. In order to gauge the severity of a problem and scale the solutions accordingly, big data is completely changing disruptive innovation. Here’s our first case study on how data can be used to identify a problem, find innovative solutions, and create a profitable company:
Case Study #1: Damon Motorcycles
In the tech-driven landscape of cloud-based solutions and artificial intelligence, an age-old, two-wheeled transportation system may be one of the last things to come to mind. But when you think about it, despite being the most common form of transportation worldwide, the motorcycle hasn’t exactly adapted to the modern era. Herein lies the problem.
Damon needed one look at the statistics to decide a solution was in order. 50% of cars making a left-hand turn will not see a motorcyclist. 40% of riders in collisions take no evasive action because they have limited situational awareness and were unable to react.
While witnessing the car industry accept smart technology with open arms, the innovators at Damon found motorcyclists to be at a significant disadvantage. In turn, the company engineered a system for motorcycles. The technology includes forward-facing radars, haptic handlebars that vibrate to alert the rider, lane-change and blind spot assistance, and digital rear-view camera. With these features, Damon created a brand that charges a premium for solving an important problem. Here are some more insights into what we can look forward to in the future of motorcycle technology.
Create a Culture of Innovation
Once a company has laid its foundation, it needs to streamline the innovation process by creating a culture of innovation. Don’t let this sound like wordy jargon for contrived, extended meetings that make your eyes roll. The most innovative companies are able to spur innovation in organic ways. Here are some ideas on how to do so:
Hold innovation crash courses. Innovation is a term that gets thrown around a lot, but not every employee is familiar with what it means in the context of their particular role. Host a course that clearly defines what’s fair game and how to transform an idea to reality.
Encourage a blame-free culture that appreciates mistakes. The more your employees are willing to try and fail, the more innovative potential you have. Here are some tips on How to Create a Collaborative Team Evironment.
Create incentives. A reward system that incentivizes innovation is a surefire way to get the thinking cap passed around. Here are 11 ideas for rewarding innovation in the workplace.
Invest. If the capital is available, don’t be afraid to create and hire a research and development department (or person). With the right attributes, someone whose sole job is to innovate is bound to make strides for your company.
Take smart risks. While it may sound trite at this point, most innovations began with someone taking on some degree of calculated risk.
Case Study #2: Lemonade
Lemonade is a company taking insurance — an industry riddled with fine print and smoke and mirrors — and giving it a technological and moral overhaul. Based on many of these Myths about Millenials, Lemonade wants you to forget everything you know about insurance. With them, you’ll find transparency, easy-to-understand language (i.e. “Policy Stuff” on their homepage), and an AI bot that runs the entire claim-making process. Premiums are low, and any extra money the company doesn’t spend on claims is given to a charity of your choosing.
With so much competition in the current business landscape, innovation and ingenuity need to be at the forefront of a company’s priorities. Based on these two case studies, we can see that innovation (and thus profitability) begin with identifying a problem (motorcycle accidents and a messy insurance industry), asking the right questions (how to protect riders and how to simplify the insurance process), and cultivating a sustainable culture of innovation. With this mindset, companies are well-equipped to tackle society’s most prevalent problems with unique business ideas.