Innovation Series — Post 1: Defining Innovation
The Innovation Series is a series of posts I am publishing focused on innovation in a real business environment — not theory, not ideal world scenarios, but what innovation really is, how to foster it within a business, pitfalls to avoid, and how ultimately it can deliver value to a business, its customers and clients.
Defining Innovation
Innovation in a large corporation
I recently spoke at a conference about how we identify what to work on in our Corporate Innovation team. This quickly turned into a talk about how to use innovation in a large business, and discussions around innovation labs, open innovation and getting ideas from within the company. There is no single answer or formula, but there are a few things that I have found to be useful to foster innovation:
What does innovation mean to you?
This is always a good place to start. I’m not talking about the dictionary definition, but more — what do you class as innovation? For some, minor improvements to the product are called innovation, whereas other businesses consider that business as usual (BAU) and define innovation as the next big break-through — the type of thing that is only seen every few years. Somewhere between those two extremes is where I aim — creating changes that are noticeably different from today, but not in the realms of the research lab.
A good way to look at this is by using the McKinsey Three Horizons applied to Innovation.
If horizon 1 is our BAU level of improvement, then the focus of innovation should be horizon 2 and 3. As this linked HBR article says, the difference between 2 & 3 is becoming smaller as technology increases the speed at which we can move.
Horizon 3 is a fun place to be, but can be one of the key reasons innovation labs fail as they become less relevant to the company and its customers today, perceived as an expensive resource that doesn’t deliver. As a rule, I would aim to keep a balance between horizon 2 & 3, making sure to deliver things that are relevant and beneficial for the company now, while having a couple of longer-term bets maturing for the future.
Nobody cares about technology*
*mostly true
There is always a new technology or technique that is “must-have” amongst technology people. I’ve seen the same vendors with the same product telling me that it is “mobile”, “cloud”, “uses AI” and “based on the blockchain”, at various stages. I don’t care, what matters is what it does for me, our business, and most importantly, our customers.
Seeing if you can launch a product that uses the latest ‘fashionable’ technology is natural — a good way to push your boundaries and look for innovation, but don’t let the use of that technology be the innovation. The same old product but with a bit of machine learning in the background looks like the same old product to your users.
It’s also easy to look at a new technology and give it a try to “see what happens”. The biggest example I’ve seen of this was around 2012- 2014 and the hype of big-data. I know of many companies that created huge Hadoop clusters and threw data scientists at them, all with the aim of “seeing what they find”. They generally found nothing as they didn’t have anything to look for. You wouldn’t do that with your accounting team so don’t do that with innovation.
A more recent example here is the rise of the Chatbot. Many companies invested as they wanted the technology — again focussing on the part that nobody cares about. Four years ago, when TUI started looking at the bot space, I was seeing reports of companies with around a 15% success rate from chatbots, with the best case being 23%. Focussing on the technology therefore meant companies were making chatbots their main customer service channel but giving the customers a bad experience up to 85% of the time. We took a different approach to ensure our customers always got an answer, while still taking advantage of the percentage of automation; we focussed on what the product should deliver rather than the technology. What did you do?
So how do you create innovation if you don’t care about technology? That’s simple — nowadays you can’t. What is important to you and your team is not what the technology allows you to do, but the product and experience your customers receive. A magical AI based platform that uses Blockchain and NFT as part of a Web 3 experience is a list of great technology, but irrelevant if it does not help the business and its customers.
Kickstart Innovation
If you are starting out in innovation, or trying to maintain momentum, I’d suggest that you consider the following points:-
- You don’t need to be a science lab inventing the future to do new things in your industry
- Focussing on a mix of horizon 2 and 3 can keep the business engaged, your deliveries relevant, and your funding
- Nobody cares about the technology, focus on the benefits your product delivers
Thinking about your customers:
- How can you make their experience better?
- What data do they need from you and how do they access it?
- How will they interact with you and with what technology?
- Consider what they need/want in the future and plan how you get there
Post number 2 is about Big Ideas & Corporate Memory
If you like what we are doing with technology and travel in TUI and want to help us on our digital journey the come and join our team. The roles we have open are here on our careers site
