Be it the innovation of the wheel, or the industrial revolution, innovation has always been intertwined with human evolution.
Businesses need to be ambidextrous, so to speak, and to think from both sides. All too often, it seems, businesses either excel at the creative side, in which case innovations usually fail. Sometimes, they excel at the analysis side, which generally leads to only incremental innovation or, more likely, stagnation.
So the burning question is how to bring innovation while maintaining the balance?
Bringing innovation in business
It can be done in various ways, but let us first understand what innovation really means, its driving factors, its models, and how design thinking can foster innovation.
Meaning of Innovation
In the simplest terms, innovation is out-of-the-box thinking. It is about implementing better solutions to tackle the current problems. In addition to that, it is about creating effective processes, products, services and ideas to grow a business. Hence, we believe that innovation is a catalyst for the growth and success of any business.
Key Driving Factors of Innovation
The infographic below explains the external and internal factors that drive the need for innovation:
Many businesses across the world have been evolving their models by using innovation as the key strategy.
How Netflix succeeded by innovation?
Let’s consider the famous example of Netflix. Reed Hastings had the vision to stream movies over the internet directly into people’s homes.
He worked almost 10 years with DVDs and then he started experimenting with streaming movies online. He finally succeeded in offering a streaming-only option for about half the price of a subscription for DVDs by mail.
This attractive pricing model along with the rising internet penetration and adoption of video-friendly devices drastically accelerated Netflix’s business. It made Netflix one of the prime examples of disruptive innovation.
Now, let’s look at Apple.
Apple’s tagline reads: Think Different. But, for Apple, it is not just a tagline, but it is their philosophy.
Apple has been consistently introducing technological innovations to the world. A company that has been regularly criticized for not having had a hit since the launch of the iPad in 2010, was valued at more than $900 billion as of January 2018.
Apple’s wireless AirPods became ubiquitous across the world. They can be paired with the best-selling Apple Watch Series 3, which has GPS and cellular connectivity, for seamless experience.
In his conversation with Fast Company, CEO Tim Cook tells why Apple is the world’s most innovative company. He explains how the team at Apple only cares about two things: “Did we make the best product, and did we enrich people’s lives?” This approach of innovation of empathizing with their users is what helps them in bringing out innovative products every year.
Using Design Thinking for Innovation
The human-centred approach to innovation also falls under the methodology of design thinking which businesses have been using for many years.
Design Thinking is simply a solution-based approach to solving problems. It is a methodology that relies heavily on human empathy and a creative mindset.
Four Basic Principles of Design Thinking
- Understanding the problem
- Exploring the avenues
- Creating prototypes
- Evaluating the results and prototypes
More and more organizations are actively using these principles to drive innovation, discover ideas and create winning solutions.
How Uber aced with Design Thinking?
Uber has always evolved their product by understanding the problem.
People were tired of inconsistent rates, untrustworthy drivers, lack of clean cabs etc. Uber understood the loopholes and empathized with the user’s pain points.
Uber’s began with a vision ‘Transportation to be as reliable as running water for everyone, in every city in the world’ and stuck to it. They created a convenient way for anyone who wants to go from Point A to Point B within a city.
Although the use cases evolved over time. They introduced multiple services like Uber Pool, Uber Go, Uber Premier, Uber Intercity. They even ventured into food delivery services by launching Uber Eats. A thorough customer understanding and user research that has led Uber to develop solutions most preferred by users over the competition.
Innovating products based on empathizing with the users is in line with Design Thinking. Entrepreneurs should look at this example as inspiration to keep innovating their business and keep it relevant.
In this article by Aakash Jethwani in YourStory, he highlights the importance of design thinking in optimizing business processes.
However, every business follows its own type of innovation. We shall now discuss the four prominent models for innovation.
Innovation Models for Business
a) Incremental: Utilizing the existing technology and increasing value to the customer. It includes the addition of new features and removal of irrelevant features to existing products or services. It is often referred to as ‘value through simplification’. Even small updates to the user experience can add value and lead to incremental innovation.
b) Disruptive: Applying new technology or processes to the company’s current market. New technology is often more expensive, has fewer features, is harder to use and is not as aesthetically pleasing.
It is only after a few iterations that the newer tech surpasses the old. It disrupts all existing companies that lag behind in the adoption of new tech. E.g. Apple’s iPhone disruption of the mobile phone market.
c) Architectural: It involves taking the lessons, skills and overall technology and applying them to a different market. It is effective at increasing new customers if a new market is receptive enough.
Most of the time, the risk involved in architectural innovation is low. It relies upon proven technology and simply reintroduces it in a new market. However, it requires tweaking to match the requirements of the new market.
E.g. NASA’s aircraft cushions that were installed for safety. A new type of foam was introduced that could react to the pressure applied to it and return back to its original shape. It was first used in medical equipment but observed larger success in the consumer market.
d) Radical: This type of innovation gives birth to new industries to create groundbreaking revolutionary technology. E.g. Airplane – it wasn’t the first mode of transport, but it revolutionized transport by introducing air travel- enabling people to reach longer distances in a shorter time.
Now that you know about the design thinking methodology and have recognized the type of innovation your business needs, let us understand how you can use the design thinking methodology to bring innovation to your business.
How to adopt design thinking for innovation?
As you must have understood by now, customer understanding is of prime importance in innovation.
Here are some ways that can help you align the principles of design thinking with innovation.
What will be the advantages?
Using design thinking to innovate will improve a lot of thing for your business like:
- Quality of products
- Reduce costs
- Competitive advantage
- Higher profits
Businesses that fail to innovate, run the risk of:
- Losing market share to competitors
- Falling productivity and efficiency
- Losing people who are keen on innovation
- Experiencing steadily reducing profits
- Going out of business
Problems with Design Thinking
It is a real challenge to inculcate a design thinking mindset in everyone in your team. The design thinking methodology uses feedback from users to iterate the product. Hence, it is possible that you might get caught up in the feedback loop. So how to escape it?
Lean Methodology to the Rescue
The solution to the problems mentioned above can be derived from the Lean methodology.
In the Lean methodology, the first step is finding out the problem that needs to be solved and then developing a Most Viable Product (MVP) to begin the process.
Once the MVP is established, you can collect data, analyze and work on growing the business further.
After that, you can create a plan and the architecture. Here, you need to consider aspects like technology, marketing, creativity and process optimization. Finally, it will lead to the creation of a powerful brand strategy.
The lean approach involves continuous prototyping, testing and experimenting. Once the prototypes are fully functional, you can launch the new product, and monitor it. This will lead you to innovate your business with every iteration.
Hence, combining the design thinking methodology with lean will definitely lead to process optimization and innovation.
How Octet Design Studio Can Help You for Driving Innovation?
We at Octet Design Studio have consulted multiple start-ups over several years. We have always recommended Design thinking to them. It has helped them improve their business processes and faster achievement of goals. You can read more on that in this story.
If you are interested in how you can achieve success with your newly established startup using design thinking, read this article.
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