Battle strategy: Innovate the way you work, not just your products and services

Are you a leader of a top-tier company in your industry that prides itself on coming up with new products and services? Do you dedicate time, resources and countless meetings kicking around catch-cries like, ‘We need to disrupt our market before someone else does!’, or ‘We need to innovate fast like a startup!’? What about, ‘We need to innovate our business model!’ ? How do you think that’s going for you?

My bet is you’re struggling to change, struggling to gain market share, struggling to move ahead of your competition, struggling to beat startups to market. Your decades of optimisation and efficiency-led thinking now seem distinctly old and slow – and that’s because, well, it is. That’s why you’re trapped hunkered behind your castle walls, spending hours discussing what to do, which new weapon or product to launch and failing to fend off attackers as a result. It’s not enough anymore to focus just on innovating your products and services for three reasons:

1. it’s not easy to consistently come up with new cut-through products and services
2. it’s no longer a guarantee of success in a market that is changing faster than all current generations have ever seen
3. when under siege, a company has limited ability to focus on innovating new weapons or strategies whilst also repelling attackers.

Just ask Nokia, Blockbuster, Kodak, Sharp, Palm or Payless Shoes – once giants in their market, they were defeated by industry shifts, new business models and superior battle strategies.Australian organisations in particular have scant track record of successful large-scale commercialisation of innovation. We are languishing behind global standards. We have little evidence we are ready for the pace of change we need to stay relevant. We are in desperate need of a fast hack.

New times call for new ways
So, the question everyone in a large enterprise is asking is: ‘How do I do what Uber, Airbnb or Netflix have done?’
Well let me tell you this:

• When Uber made a dent in the taxi industry, they didn’t invent cars, passengers or location-based technology on phones.
• When Airbnb offered the world, people’s spare capacity in their homes, they didn’t invent the rooms, the guests or internet bookings.
• When Netflix first launched their mail order DVDs, then their movie streaming, they didn’t invent the DVDs, the content or digital downloads.

These startups didn’t innovate a product or service. They innovated the way they worked –and they used technology to help them do so. When technology shifts forward, it enables new business models. These new business models can innovate the way industries work, the way companies work and it’s this market innovation that we are seeing a lot of right now. One tell-tale sign of market innovation is when companies enter spaces where they have no traditional footprint, or when startups change the prevailing way business is done in an industry. In each case above the proponents flipped prevailing industry norms.

• Uber flipped making a phone call to order a taxi and the guesswork associated with the arrival time.
• Airbnb flipped having vacant rooms in homes and the impersonal nature of hotel stays.
• Netflix flipped having to go to a bricks and mortar video store to rent one or two titles, get in the car to take them back or incur late fees if you didn’t.

Sure, inventing the next Tim Tam, Walkman, iPhone, 3D TV, Viagra or Alexa AI assistant product sensation would be great for your organisation, but how many of you are in that game and winning?

Professional services businesses out there now have online doctors (GP2U), Ross the world’s first artificially intelligent lawyer, AI accountants and Robo Advisors for investing.

There are only going to be a handful of companies that benefit from the invention piece of these technologies. The rest of the world must innovate the way they work by using the new business models they enable.

You are better off working out how to utilise new technology to change your business model than you are working out how to invent the next product or service mousetrap.

Shift your thinking
Any corporation that wants to have a future must get better at fast market shifts. You have to spend time innovating the way your company works, which you do by using what I call the Xcelerate framework:

1. Business model – what’s your income-generating asset and activity (one of 24 types in today’s market) e.g. digital: distribution?
2. Revenue model – how you charge your customers e.g. own or rent? How many parties involved?
3. Communication model – the way you go to market e.g. face to face or word of mouth?
4. Differentiation model – the way you differentiate from your competition e.g. price, product or service?

You must disrupt your own thinking and learn to innovate the way you work if you want to be a successful organisation that stays in the game. The only question you have to ask yourself is: ‘Are you ready to take on that challenge?’

The product innovation problem
To understand the difference between innovating a product or service, and innovating the way you work, let’s look at a classic Apple example:

1. when Apple launched the iPod it launched a new product - aka a new weapon
2. when Apple enabled music downloads, they changed the prevailing way the music industry worked, thus they created an entirely new battle strategy.

Many of today’s most successful companies have not invented anything; they are just changing the way things are done; strategy not weapon.

Will your company be one of them?


PAUL BROADFOOT is an entrepreneurial strategist and the author of Xcelerate: Innovate your Business Model, Disrupt your Market and Fast-hack into the Future. He works with enterprise executives, next level leaders and intrapreneurs to identify high-growth opportunities and create new business models in times of rapid market change. For more information www.paulbroadfoot.com or contact [email protected]