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Innovation. It’s a magical word. It conjures up images of patentable products customers clamor for that result in untold revenue growth. Of services that enthrall customers and engender undying loyalty to your company. And operational efficiencies that generate untold millions in productivity improvements and profitability. In other words, nirvana.
Much has been written and discussed regarding innovation for distribution channels and that “distributors need to innovate to survive.” In fact, did you know that according to Amazon there are 73,933 business books related to “innovation”? It’s not a new subject.
Distributors are Innovators
With so many books on innovation available you would think company executives would have easy access to the answer to their innovation challenges. The reality is that many distributors are innovators and continue to innovate — for their customers, suppliers and themselves. In many cases, the original innovator within a distributor, manufacturer or manufacturer rep was the founder. They found a need (perhaps an unserved market), took a risk and invested into a business.
Companies have a continual need to innovate. Sometimes it’s incremental, sometimes it’s a major new product or service, and sometimes the innovation supports a customer’s needs, or a market niche. And then there are the “Ah Ha!” moments where someone has an epiphany for a new product or service that turns into new revenue streams. Which of these is more frequent?
Culture Drives Innovation
Before highlighting potential approaches to becoming more innovative or addressing organizational challenges, it’s important to emphasize a key tenet of innovation: The culture of your company and the personality of the people within your company are the determinants of how innovative your company either is or can be. It all starts with people and it takes communication.
Innovation cannot be mandated or structured as a process. It needs to be inherent in your organization and cultivated in an open, safe environment where idea generation and communication is encouraged and where change is desired, expected and acted upon. The organization must be decisive, seek to serve customers (internal and external, upstream and downstream) by soliciting feedback, be willing to resource new initiatives, analyze performance and measure activities to determine if defined “success” is achieved. Once achieved, the success should be communicated, recognized and ideally celebrated.
There’s one other foundational criteria — a willingness to take risks. Sometimes it’s “bet the farm” types of decisions, other times it’s “let’s take a chance.” If you have this type of culture, then you are ahead of 98% of companies. If not, it could be a senior management issue, a reluctance of middle management to buy into initiatives or it could be your hiring process. It all starts with people and it takes communication.
Innovation takes intellectual curiosity. People need to want to explore change and be eager to find a better or different approach to addressing an opportunity or issue. Employees need attributes relating to:
- Risk Taking
- Initiative
- Creativity
- Resourcefulness
- Attitude
Moe Glenner, president of Entredex, integrates these into exercises to calculate an Innovator’s Predictive Index that helps assess company management and key new hires. Moe is the author of Selfish Altruism: Managing and Executing Successful Change Initiatives and Plus Change: Genesis of Innovation.
Once people are identified as being “intellectually curious,” they need to expand their frame of reference to be exposed to ideas and tools from others within the industry, from complementary industries, and from non-complementary industries where they can figure out how those ideas might work for them.
Once you view an issue as industry agnostic, different ideas can be explored and developed. And to get through the naysayers within your organization, use the “Five Whys” iterative approach to reach the root case, and perhaps you will get to the “true” reason.
Expanding Your Frame of Reference
A key to success is observation and adaptation. Here’s where you can look for new ideas you can borrow and adapt for your own use.
Industry network groups are great but they only provide 100,000 feet level nuggets. If you hear something you find interesting, reach out and interview or visit. Some manufacturers, reps and distributors have network groups that regularly get together, and sometimes at different levels within an organization, to share ideas.
Network with other local businesses. This could be via breakfast clubs, functional groups such as the American Marketing Association or Vistage (www.vistage.com), Young Presidents Organization (YPO) or similar groups.
Read, read and subscribe. More than just books. Every book takes at least a year to develop and publish. I’m not saying they are bad, on the contrary, they can be good anecdotal case studies. But read trade publications (other trades), read what your customers read, read what your professional contemporaries are reading (i.e. sales, marketing, purchasing, IT journals) and subscribe to e-newsletters and blogs. Be an information consumer.
Develop multi-disciplined task forces or work groups within your company to address issues. People can feed off of the experiences and energy of each other. And, depending upon the issue, perhaps bring in channel partners.
Years ago, GE brought significant value to selected distributors through its Six Sigma program where they brought in process experts to help distributors, and sometimes GE personnel, address distributor-specific issues or GE/distributor issues. And the company opened its corporate training resources to its distribution channel to help train in many functional areas. Rockwell is doing this in targeted environments to improve distribution sales and management skills. Multi-discipline task forces can also be an effective way of involving Millennials and identifying future leaders.
Get feedback. Many times conducting research will help guide you to a breakthrough or an answer. Bringing in the voice of customers, salespeople, employees, suppliers, prospects, manufacturer reps and others can generate a different perspective and identify needs. Sometimes it involves survey activities, sometimes field research (observational as well as telephone), and sometimes it’s asking customers or prospects (and not just the same ones you always talk to).
Use consultants. It may not be for a major project but consultants are exposed to a variety of companies. They can share best practices or different ideas while protecting client confidentiality or providing geographic exclusivity and they can bring a third party perspective that can be politically unbiased. Buy a day a quarter, put them on your board, consult via phone. Don’t become encumbered by “drinking your own juice.” Remember, you’re probably not the only company that has ever faced this issue or tried to apply the same idea.
Different Types of Innovation
Innovation does not have to be radical change. Some innovation is really incrementalism, which is needed within every organization and should be an expectation of every manager.
The other type of innovation occurs when you either set game-changing goals (those that require rethinking the current status) or you stumble upon an idea. Remember that Post-It notes were the outcome of a failed product development initiative. Remember that Google and Amazon.com have started many initiatives (i.e. Google for Suppliers and AmazonSupply) only to either close them down or improve upon the model. Innovation takes risk-taking and a willingness, perhaps an acceptance, that you may fail but will then continue your journey.
Another key to success is being nimble. Speed to market, internally and externally, is important. You may never get it 100% right the first time out of the box. Instead, conceive, research, launch, measure, then re-innovate or re-imagine. The key is having a vision of your future. Your competition will copy you but if you already have the next iteration conceived they will always be behind you.
No one has a monopoly on innovation. It’s what you make of it. Do you have the temperament and the culture to innovate?
