Innovation is becoming increasingly more recognized (and essential) in the B2B world, yet many B2B companies don’t view themselves as particularly innovative.
Additionally, leadership doesn’t necessarily know the critical steps needed to make a significant change in how they successfully approach innovation. So, what are some of the key steps needed for a B2B enterprise to successfully embrace innovation?
1. Start from within.
The leadership of the organization must first recognize and acknowledge that innovation is critical to the future success of the organization. More than words in a vision statement, innovation must be part of the everyday fabric of the organization and occur at all levels within the company.
Goals should be set based on what the company is trying to accomplish from a business perspective using an innovation process. Dedicated roles and responsibilities should be assigned. A culture should be shaped that allows a company to embrace new thinking, reward success — and acknowledge failure.
Innovation cannot succeed without internal buy-in and support.
2. Define innovation.
Innovation should be defined against the distinct goals of the company. Many companies focus their innovation efforts around creating new products or services, but leadership may not want to limit that definition to just those aspects.
Innovation can include new business models, new processes, driving cost savings, continuous improvement efforts as well as new growth opportunities, and could encompass all aspects of a business. Consider what makes sense for your business.
However, don’t be concerned that this definition is a lifelong commitment that cannot be changed or evolved. In fact, evaluating the definition annually is an effective way to ensure your innovation program is working optimally for your organization.
3. Follow an innovation principle.
Having a philosophy to guide the innovation process helps especially when navigating the fuzzy front end of innovation. Embrace an approach like Design Thinking. This is a non-linear, iterative innovation process that helps teams better understand users, challenge assumptions, re-define problems and create innovative solutions. This provides guardrails for the team.
A methodology like this in the B2B space encourages companies to reach out to an even broader ecosystem to have buyers, customers, vendors, academia and end users participate in the innovation process.
Through this type of approach, experiencing and empathizing how these stakeholders are using and interacting with a product, service or process brings unexpected insights and co-creation opportunities and fortifies innovation results.
4. Consider inside vs. open innovation.
While many B2B companies look internally to oversee and execute their innovation strategies, more and more companies are embracing open innovation as a tool to expand their innovation funnels.
Open innovation consists of companies using multiple outside resources including customers, vendors, outside agencies, partners, etc., to drive products, service, business models or process innovation.
With a clearly defined problem statement and specific guidelines in terms of how a contributor can benefit from contributing an idea (cash award, rights to commercialization, etc.), open innovation can be a powerful process to generate new ideas and a consistent contributor to your innovation funnel.
5. Learn and practice innovation.
Innovation cannot be done in a vacuum. B2B companies should encourage those responsible for innovation to be exposed to new technology trends such as AI, blockchain, data analytics, new user interfaces — all of which have accelerated innovation and market growth across industries.
This can include bringing in vendors, partners, agencies, academia and outside experts from a particular field to share something evocative to an innovation team.
Once shared, the team can collaboratively innovate solutions and opportunities against the subject matter. Practicing helps to hone innovation skills, gives a variety of stakeholders a chance to experience the company’s innovation process and continues to fill the pipeline with new ideas.
6. Measure the success of your innovation program.
Because the goals of the innovation program were clearly established early on, it’ll be easier to measure the results. Beyond the ROIs, KPIs or innovation sales rates (ISRs) being measured, an innovation program should be evaluated based on other criteria as well. Some areas to consider:
- Number of commercialized products from the internal team vs. open innovation throughput.
- Production of patents, trademarks, IP, etc.
- Number of concepts in the short-term and mid-term innovation funnel.
- Number of projects terminated or pivoted.
- Speed of innovations to market.
The innovation process can seem intimidating, but clearly many B2B companies have cracked the code and are now beginning to approach it the right way. The important thing is to get the process going and give innovation a try … all it takes is six easy steps.
About the Author:
John Edelmann – Executive Director of Innovation
John is the Executive Director of Innovation and Client Development at Elevation Marketing. His industry expertise is deep and varied. Before joining Elevation, John operated his own strategic marketing agency for 14 years which focused on innovating and renovating new brands, products, and services.