The Innovators’ Dilemma* (by M. Clayton Christensen) suggests that companies pander disproportionately (and develop) to current customer needs. In so doing they stand to miss the opportunity to develop (their business and/or products) to cater for possible next big thing.
While this may be a problem for large companies, I’d suggest perhaps more so for smaller businesses. Those with fewer if any resources to investigate the opportunities for ‘next generation’ while wrestling with day to day needs and budgets in delivering ‘evolutionary’ product development.
What to do, where to start, who can help, how much will it cost and what payback will I get? All good questions; but let’s take this one step at a time. Connected ecosystems and the IoT era has ramifications on businesses, products and customers well beyond those that were envisaged even a few years ago. Indeed, many businesses struggle to understand opportunities, the value propositions they might bring to the market and options to develop and deliver.
We can all learn by example, so let’s do just that. Savortex is one such company that’s grasped the IoT nettle to dramatically change their proposition. Their product that was (and still is) for all extensive purposes an excellent standalone hand-dryer sold in quantity, with regular service contracts.
Recently, they improved and IoT-ised their product. As well as creating a device whose function and energy-savings were a leap beyond their former model, they adapted their products to include IoT enabled sense and services for their customers. An interesting twist being that the additional revenue streams for these services are often from new customers, with new budgets, for example from the owners and/or operators of the buildings that contain the hand-drying products.
Now for their next (current) leap of innovation. Savortex’s new generation of product builds on their previous generation of products to provide customers a chance to make revenue off their hand-dryers via push based advertising. How’s that for left-field thinking!
So what can we draw from this example?
To innovate and create the next potential big thing in the world of connected/IoT doesn’t require you to be big. It’s more to do with thinking outside the box and looking at what propositions or experiences can be delivered by your product or the services you can deliver from its use or situation.
Revenue and profit streams of old are not necessarily the (only) streams for the future. One might need to adapt and/or revolutionise the dynamics of your products, the services you deliver and your business as a whole. Taking a lead from the Savortex example, there might also be adjacent or new customers that can capitalise on your product’s situation and/or its IoT enabled data streams.
Of course there are many other lessons to be learnt from the Savortex example. But as I mentioned in a previous post, simply getting going can be a daunting and confusing exercise, perhaps some thoughts on what/which processes and tools might be practical and available? Especially for those just formulating their IoT strategies…. or might readers want me to delve into detail?
*The innovators’ dilemma: When New Technologies Cause Great Firms to Fail (Clayton M. Christensen, Harvard Business Review Press)