Can Corporates Innovate Like Startups?

How leading Australian brands are pioneering change.

With the rapid rise of technology startups such as Uber, Netflix and Airbnb turning entrenched industries on their heads seemingly out of nowhere, the stakes for innovation have never been higher. And it’s not limited to the booming tech industry of Silicon Valley either. So the question remains, how should established organisations look to embrace and replicate the level of innovation currently present in the market in order to compete?

In this era of disruptive innovation, businesses cannot confuse innovation with the growth strategies of product extension and market penetration associated with incremental innovation. Rather, innovation should be embraced as part of the corporate culture through which dynamic and sustainable future revenue streams are developed for an ever evolving market. Businesses need to stay ahead and be agile enough to adapt to change in a moments notice.

For many businesses, this may mean a complete reevaluation of their core value proposition. For others, it may be an overhaul of their service implementation and supporting systems. Whatever the case, organisations must learn how to adapt or pivot as quickly and effectively as possible. A great local example of this is Domino’s Australia. For years Domino’s simply sold pizza: pick-up or delivery, meatlovers or supreme - those were essentially the options. Today, Domino’s has an ingrained culture of innovation that has seen an array of digital applications incorporated into its product offering. You can track your pizza order on practically any device (even the Apple Watch!) or become a certified pizza mogul and earn an income by contributing new recipes to Domino’s ever growing menu.

Another example in the retail space can be seen in Lorna Jane who recently launched SocialEyes to optimise their in-store experience for retail customers. Using interactive digital mirrors installed in stores, customers can take photos of themselves in potential new outfits and immediately upload them to Lorna Jane’s social media communities for feedback. This kind of innovation plays to Lorna Jane’s strengths in retail and builds their brand using digital in ways previously unimagined.

Validation, the basis for successful innovation.

In the case of startups, innovation is obviously critical to what their business has on the line - everything. When survival relies completely on developing an indispensable product or service and a sustainable business, innovation has to be done right. In the words of W. Edwards Deming, (the father of the manufacturing quality revolution) “The customer is the most important part of the production line”. The same remains true in this age of digital innovation. Before over investing in a new proposition, businesses should ask themselves, “Is this something that consumers actually want?”. Organisations young and old have failed to adequately consider this question. From Coca Cola’s “New Coke” fiasco in the mid 1980’s to the star studded yet bewildering launch of Jay-Z’s “Tidal” music streaming service, successful innovation cannot be achieved without quantifiable user validation. In short, you can’t innovate in a vacuum.

Getting early validation is critical to future development. Defining a minimum value proposition (MVP) that can be rapidly prototyped and tested with potential users will set a baseline for fine tuning. As a proposition moves through the acclaimed Lean Startup cycle of build, measure, learn, each new release is based on real and measurable user insights. A great example of this is, Credit Union Australia’s “Deposify” app. Currently in its pilot phase, Deposify helps users set and achieve financial goals in saving for a first home deposit. There’s no doubt that the early versions of Deposify will provide valuable data and insights to inform the future direction of the project, saving Credit Union Australia time and money on unfounded assumptions.

Thinking like a startup.

Startups and corporate innovation teams utilising the Lean Startup methodology are typically nimble, flexible and better equipped to adapt to change. They focus on getting to the heart and value of their innovation as quickly as possible and without waste. Ultimately, their ventures are far more likely to succeed because they are designing solutions are validated needs while achieving what is both sustainable and scalable within their market.

The question for every organisation then, is not whether to embrace digital innovation, but how? The confines of traditional corporate systems are generally at odds with cultivating innovation, leading to either failure or excessive waste. So for organisations to succeed with innovation, there needs to be senior buy in and adoption of the culture and methodologies that enable it. This places internal teams on the same playing field as startups but with the added advantage of existing company expertise and data. Empowering teams to work from methodologies such as the lean startup enables them to break out of the rigid corporate cycle and deliver cutting edge innovations that ensure sustainable business into the future.

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