How to innovate an old industry and where should you start?
Innovation is no more a luxury that was only embraced by the large corporates but is now a necessity that would help us not only survive but also thrive in these challenging times.
However, it is indeed a bigger challenge when it comes to old industries, and we are familiar with the fates of former industry leaders such as Kodak or Nokia.
Airports and airlines are classic examples of embracing innovation to deliver superior customer experiences. The aviation sector, which has been around for 100-plus years, has steadily innovated from online ticketing to digital boarding passes.
How have they been able to do it? What is it that other similar legacy industries can learn from them to not only stay relevant through innovation but to stay ahead of the curve?
There are four key pillars in innovating in a legacy business or a category:
1. Understanding the customer
Customer-centricity is an obsession of sorts to deliver an unmatched customer experience to the paying customer and is the first element in innovation in a legacy business.
Customer-driven innovation demands an understanding of the customer segments and their needs, their lifestyle, and not only the need gaps that are articulated but also learning the unarticulated needs of customers.
As in the philosophy of design thinking, the key to a successful customer-oriented innovation process is an "empathetic" understanding of the customer and the real-life challenges in the usage of the offered product or services.
The automotive industry has been quite successful with connected car technologies that allow you to pre-cool your car before getting into it or receiving alerts about the nearest fuel station when you are low on fuel. Self-driving cars take innovation advancement to a whole new level.
However, the aviation and the automotive industry are driven by stiff competition, which, by itself, is a strong catalyst of innovation in these legacy industries. Customer-centricity is the key to innovation.
2. Understanding the market
There is a powerful line that goes, "Listen to your customer but react to your market." Clearly, companies and organisations that understand and track the marketplace within and outside their categories fare better when it comes to adopting innovation.
The automotive industry does a phenomenal amount of customer research to map their customer needs and track the competition to stay ahead of them through innovation.
Most of us do not realise that market is a function of multiple elements. An industry could not only be disrupted but potentially made redundant by a player outside the industry. A case in point is how wristwatch brands suffered a setback when mobile phones could tell you time. Taxi-hailing services that threatened the sale of personal passenger cars are another example.
It is not by luck or chance that brands like P&G or PepsiCo have been leaders in their categories for over 100 years. The sheer amount of investments they have made in understanding the markets and customers has given them the edge in innovating relevant products for their customers.
Hence, for innovation, the ability to have a comprehensive understanding of the market landscape is essential.
3. Creating a culture of conversation and collaboration
Creating a culture of openness is the third and critical pillar of kick-starting the innovation engine, especially in the older industries. A favourite management quote of mine is, “Culture eats strategy for lunch," which is true in any geography, size or category of business.
A great litmus test of the organisational culture is how organisations handle failure. In fact, this single-handedly makes or breaks the organisation's innovation appetite.
Hence, organisations must encourage open innovation as a way of doing business.
Hence, a well-demonstrated intent and the inclination of the leaders in the organisation to embrace innovation or innovative thinking would go a long way in building a culture of innovation in an old industry.
4. Conducting innovation workshops:
It could be that first step to starting conversations in an old industry for priming the innovation process. Sometimes gathering a small set of open-minded people regardless of their roles and grades to get a conversation started on solutions to real-life challenges is a great way to build an open innovation thought process in the organisation.
Creating working groups that would eventually build the innovation labs of the organisation to power the innovation engine would lead to a systemic process of innovation in any old industry.
(Disclaimer: The views and opinions expressed in this article are those of the author and do not necessarily reflect the views of YourStory.)