How to stop competing on price, quality, and service alone and begin innovating

It's been a topic that has come up over and over lately with our clients and prospective clients. How do we innovate and lead in our industry?

Not all companies want to innovate or lead - many are content to just do their work well and hum along. That's great, but for those leaders who want to push the envelope and not just copy the competition, how do we do that and still provide a viable service?

All significant breakthroughs (in performance results) come from break-withs in old ways of seeing.
— Thomas Kuhn

Here are some helpful tips from people who have innovated big industries:

Think outside your industry - Bryan Chesky, Founder of AirBnB, said "You will never innovate in your industry by looking only within your industry. You have to look outside of your industry." That is why AirBnB brought in film and story tellers to help them craft their customer experience, and drew from technology and the internet to allow people to share extra space in their homes.

Stop competing on the same factors as everyone else - "Blue Ocean Strategy" is an approach to innovation that says don't compete on the same factors that everyone else in your industry is competing on (in Home or Consumer Services that is usually "Quality, Service, and Price"). Competing only on those factors is called "Red Oceans" because it is full of sharks and competition is fearce. There's blood in the water there. Instead, search for "Blue Oceans" by competing on different factors. (Reference: "Blue Ocean Strategy" book for further reading)

Are you sailing in red oceans or blue?

Are you sailing in red oceans or blue?

Helpful questions to ask yourself when seeking to innovate:

  1. Am I thinking inside the box of the past reality within our industry or our business? Get outside the box to begin opening up the possibilities of creativity.

  2. Ask yourself, "What if we started this business today? How would I do it in today's world, with today's tools, and the way today's customers behave?" The reality is, the world has changed rapidly with mobile technology, the internet of things, social networking, artificial intelligence, virtual reality, and augmented reality. Millennials don't buy the way our parents bought, and different things like authenticity, trust, and ease of accessibility online are more important to them now. What if you were going to start a landscaping company today? What if you were going to start an electrician business today, or a pest control company, or a dentist office? Now more than ever the old paradigms are shifting, and if we're going to innovate we better be ahead of the trends. (this idea was taken from Clayton Christensen's book, "How Will You Measure Your Life." Dr. Christensen is a professor at Harvard Business School, and one of the foremost thinkers and writers on innovation.)

  3. What are things I shouldn't innovate on, and what are areas I should innovate? This one is a tricky one. Kurt Vonnegut said, “If you want to break the rules of grammar, first learn the rules of grammar.” It’s similar in business. You might not need to innovate how you run company meetings, or how often your leadership team meets, or job descriptions, or how you handle payroll and taxes. Maybe you may want to innovate some of those things, but more then likely the value of innovation will be in your product or service itself. What do you offer customers that they can't get anywhere else? That's where innovation is going to crush the competition, and get you out of the rut of competing on the same old rules. Verizon Wireless was crushing the cell phone market when tiny T-Mobile came along. T-Mobile could have tried to compete on coverage, but they would have been killed because Verizon's coverage was second to none. What did T-Mobile do? They decided to be the "anti-Verizon" the "un-carrier". They did away with 2 year contracts and offered month to month service. They branded themselves as fun and un-corporate and a company for the people. Today T-Mobile is a large and competitive company, because they didn't play Verizon's game. Verizon had every advantage on them - better coverage, better products, billions of dollars to spend on advertising and marketing, way more customers, etc. In “The Innovator's Dilemma”, Clayton Christensen shows how big companies are locked in, less nimble, and less able to innovate. It's the little guy who can come along and do something completely wacky and completely different. That's good news for us little guys!

  4. Do I have a partner that can help me think outside of my experience? For AirBnB, that was a partner from the film industry they brought in to help them tell their story and design their ideal customer experience.

Innovation doesn't have to be sexy. Sliced bread was a slight tweak in the way bread was being packaged and sold. It could be a slight tweak, not too far away from what you're already doing, that makes waves. For T-Mobile that was a quirky and edgy brand coupled with a re-packaging of their data plans.

Our clients like to work with us partially because we help them think outside of the industry box, since we have had clients and experience in over a dozen different industries. We've served some of the 10 richest people in the world, designing service and communication for them, all the way down to small non-profits working in the third world to serve literally the poorest people in the world, and all kinds in between. Do you have a partner who is helping you innovate in some smart places, and helping you create something unique in your industry? If not, consider reaching out to ALIGN to have a conversation around whether or not we could be that partner for you.

By Chris Cloud

For Further Reading & Study: