After the introduction on The Innovation Competency within „Innovation is the driver for success“ the dimension „creativity“ and how companies can integrate and demonstrate creativity across the customer chain will be outlined by Atlee Valentine Pope, President and CEO, Blue Canyon Partners Inc. and partner of the STRATORG ALLIANCE GROUP, the white paper “Breakout Growth: The Innovation Competency” .
Shawn Hunter, author of Out Think: How Innovative Leaders Drive Exceptional Outcomes (Wiley, 2013) defines creativity as the capability or act of conceiving something original or unusual. Innovation is the implementation or creation of something new that has realized value to others. It takes creative abilities to develop innovative products, services, and solutions. A supplier that has these creative abilities and applies them in areas of critical importance to a customer is more likely to be highly valued compared to its competitors.
Creativity initiated by close relationships with customers
Creativity begins by working with customers to develop innovative new products, services, processes and market strategies. When evaluating your company’s innovation creativity, questions to consider should include:
- Is my organization successful in solving problems that arise in the context of our customer’s use of our products and services?
- Is my organization involved in initiatives related to the end customer as well as other customers participating in the customer chain?
- Do my buyers credit my organization as having contributed to its sales and ultimate success?
There are three ways in which enterprises can demonstrate creativity across the customer chain—to their direct buyers, intermediaries, and end customers:
1. Offer a new, never-been-done-before product/solution/service
Innovations that make a contribution to sales and marketing by allowing customers to sell a differentiated offering at a higher price point. Examples include:
a) A packaging supplier creates a unique design with unusual materials to enable its important consumer product customers to merchandize their holiday products. As a result, consumers gravitate to this unusually appealing packaging and sales increase.
b) Food ingredient suppliers that focus on new flavors, unusual textures, and health and wellness to allow food companies to bring new products to market. The explosion of non-gluten bakery items and ethnic sauces are just a few examples of how suppliers are helping food service customers differentiate on the shelf.
2. Address an unmet need
Innovations that allow buyers to differentiate themselves by meeting unmet needs or addressing long-standing challenges. This can involve virtually any dimension that matters to customers, such as product safety, performance, reliability, shelf life, etc. Examples are:
a) A chemical supplier that added a sealing capability to finally eliminate spillage problems with a hazardous product. This resolution helped its direct customer expand its product placement two-fold across different big box retailers.
b) A component supplier that developed an improvement for its electrical outlet covers to help electricians install quicker and more cost-effectively. The new enhancement no longer required the contractor to find five separate parts (four screws and an outlet cover), kneel down, and screw the plate into the wall. Rather, the supplier created a new hooking mechanism on the outlet that allowed the installer to kick the plate into the wall, which would remain closed and secure.
3. Eliminate overlapping costs along the customer chain
Innovations that improve processes and systems that allow all customer chain participants to make a higher profit. Often these types of innovations involve process changes, material substitution, or shifts in the roles and boundaries between the supplier and its customers. Two such examples include:
a) An auto seat supplier that adopted a just-in-time system to deliver seats at the right time and in the right quantity to its OEM customers. The supplier worked closely with its customers’ demand forecasting management systems to be able to respond quickly to fluctuating supply and demand. The new system allowed the supplier to produce and deliver a car seat to the OEM in 45 minutes, which it was able to seamlessly place into its production line so that the complete vehicle could be shipped to the dealer within three hours.
b) An equipment supplier bolstered its dealers and distributors demand for more advanced and better technical know-how. In addition to providing more training, the supplier worked in collaboration with local colleges and trade-schools to help recruit trainees.
Very often, the supplier itself will gain from these activities. The supplier’s success is inevitably linked to the success of its customers, and to the extent that its creativity can help its customers to be successful, it will benefit directly.
All of these considerations—eliminating overlapping costs, addressing unmet needs, and bringing new- to-the-world capabilities—form a foundation for success in terms of innovation and initiating contributions. Familiarity, partnership, knowledge, and commitment are often prerequisites to developing an Innovation Competency. Several other considerations are important as well. Primary among these is ability. It takes ability to get ahead of opportunities and problems and to develop creative ideas. While ability in general is good, the supplier that can concentrate ability in the areas that define its customers’ critical success factors has the greatest potential for success. Blue Canyon has helped suppliers develop self-assessments relating to their ability to serve their customer relationships. One of the most difficult metrics has always been the supplier’s ability to offer breakout thinking to their major customers.
While the ideas themselves are often highly inventive and creative, high-performing organizations that foster them do so with a deliberate approach to stimulate innovation and ensure that ideas are developed and shared with their key customers in a smart manner. Among the many approaches available to suppliers are ideation sessions supported with stage-gate processes and agile engineering techniques. Most importantly, however, is getting customers’ perspectives. Without gathering and assimilating thoughtful, insightful customer input, creative ideas are only a good as the whiteboard on which they were created.
About the author
Atlee Valentine Pope is president and chief executive officer of Blue Canyon Partners, Inc., and the co-author of the growth strategy book CoDestiny: Overcome Your Growth Challenges By Helping Your Customers Overcome Theirs. In addition to overseeing Blue Canyon’s operations, Atlee works directly with a number of clients to produce market-driven answers and actions plans that foster profitable growth. More recently, Atlee’s work has included helping clients in areas such as channel management, strategy implementation, pricing strategies and adjacencies.
More you can find on www.bluecanyonpartners.com.