We’re almost there on showing a complete roadmap for profitability. I can confidently say that if you follow each of the 4 letters we’ve explored so far and implement well, it is well within your reach to double your profits safely, sustainably, and with integrity within the next year, in less time than you’re devoting to email.
When you have powerful insights to set the bar higher, the 5Rs helping you achieve rapid results, a way beyond LEAN to obliterate costs that should never even be in your business in the first place, and the confidence to fearlessly price for all the value you create, you have a lot more profit showing on your bottom line… and a lot more possibilities.
During Manufacturing Month, the focus is all about building a stronger, thriving business and I’ve given you all the basics, plus some great downloadable resources. Now it’s time to introduce the wildcard for profitable growth that every company has on their Strategic Plan but rarely does effectively: Innovation.
Is Innovation One of Those Things You Never Get to on Your To Do List?
Do you struggle to find the time and sense of direction to get beyond good intentions to be innovative? It’s time to decide whether to lead your market or play follow-the-leader in today’s tough, competitive marketplace.
If you’ve gotten this far in the P.R.O.F.I+T Roadmap, you already have everything you need to take action and see results.
The deep insights gained from having Value Creation Conversations with your best customers will identify all the challenges and problems your customers are willing to pay good money to solve. They should be paying you for solutions!
Simply turn the knowledge, creativity, and talent in your company into ways that: save your customers time, save or make them money, solve their real problems, and provide them peace of mind – that’s innovation.
There’s a big difference between invention and innovation.
Inventions often cost a bundle in R&D and marketing, then sit on the shelves unsold. They may have been cool ideas, but nobody wanted or needed them. However, when you innovate in ways that create the value your customers want and need, your innovations will sell like hotcakes.
More often than not, the secret is NOT to innovate new products or services, but to create either more experiential value or more emotional value within your existing offerings.
Buying decisions are made first on the basis of emotion, and only then are the functional elements and prices used to justify the decision. If you’ve ever fallen in love with a beautiful car because of the smell of the leather seats, you know what I mean.
Experiential and emotional ways of adding value are low-risk, low-cost forms of innovation that require nothing more than a deep understanding of your customers’ needs and wants plus good dose of creativity and common sense, rather than deep R&D pockets.
They can be successfully brought to market quickly and easily because your customers have already told you they want them.
The best way to understand the full scope of the options to innovate is to pick up a copy of my book, Profit in Plain Sight: The Proven Leadership Path to Profit, Passion and Growth. You’ll find two eye-opening frameworks for Innovation, tons of examples, and some extra resources that will help you dig deeper to apply those frameworks to your firm. For about $7 for the Kindle and under $25 for the book, this is one of the best investments you’ll make in your business all year.
In the meantime, let me wet your appetite:
Experiential Value gives new life to old products and services
Opportunities to innovate with Experiential Value address the first 3 forms of “Find Your Lettuce” Value:
- save your customers time
- save or make them money
- solve a real problem.
I’ve adapted the classic Product Lifecycle Model to include 13 Experiential paths to innovation, each of which hits the sweet spots above in ways that are highly appropriate for “mature” products and services, which is exactly where most manufacturers get stuck and start seeing their margins squeezed for discounts. This element of Roadmap is perfect for you when you’re becoming commoditized and undifferentiated in the eyes of your customers.
Simply apply them as filters to the insights you’ve learned from your customers, select those that create value, and drive tangible results with paths to innovation that are hard for your competitors to copy.
Emotional Value creates desire and brand loyalty
This is the second model the Innovation Cocktail, because it provides 8 more paths to innovation by creating the perfect blend of Functional and Emotional value.
When customers feel truly passionate about your products or services, it’s usually because you’ve tapped into the last two areas of value creation:
- Create a feel good
- Provide peace of mind
Remember the smell of those leather seats? NEVER underestimate the power of the feel good. And if you’re an auto-club member, you’ve already succumbed to the lure of peace of mind.
The Infinite ROI of Innovation Applies to Big and Small Companies
Apple has successfully and repeatedly leveraged all 21 paths to innovation illustrated in the Lifecycle and Cocktail models on their journey to becoming the world’s most valuable company.
This can be intimidating to any business, large or small, because few have the creative talent and deep pockets that Apple has.
Don’t let that stop you, because I’ve used each and every one of those same 21 paths to innovation in my own small business. I didn’t have to add more people or make huge investments in overhead to leverage each one of them. That’s why one of my clients calls innovation “The Infinite ROI”, because in many cases you’re simply leveraging the resources your already have.
Value-add innovation is timeless and classic, and that’s why it works for companies large and small.
Don’t settle for high-risk, high-cost attempts to invent when you could be leveraging the deep insights your customers don’t even know they possess to drive low-risk, low-cost innovation.
You’ll never discover those insights using conventional focus groups, market research or surveys. You have get inside their heads in a value-add way, face-to-face. And the best thing is that you can do it in about 90 minutes once per week – less time than you spend on email per day! Unleash the wildcard for profitable growth: Innovation.
When was the last time your company was truly innovative, able to leapfrog your competitors and capture the hearts and minds of your customers?