Discussion of industry disruption and “disruptors” are dominating today’s tech conversation. Innovative companies continue to burst onto the scenes of stale industries, creating consternation among rivals that have failed to show consumers a better way of doing business. Technology enables that kind of innovation, but the right conditions must be present first for innovation to take root.
In order to better understand the drivers of innovation and how technology can help companies become more successful, AT&T recently commissioned research by the University of Cambridge’s Judge Business School to find out if it’s possible to predict where innovation will occur in business.
The result of that research was the identification of six distinct trends that help businesses grow, thrive and disrupt: the Six Degrees of Innovation. This study offers business leaders across industries powerful lessons to help their companies succeed in the face of increasing and intensifying competition.
1. Personalize to win.
The rise of big data and consumer Internet adoption allows companies to build more personalized relationships with consumers. This creates more intimate customer transactions and increases the likelihood of selling products and services.
Take a certain e-commerce and cloud computing company, widely recognized as a leader in personalization. Its recommendation engine, which determines customers’ interests by looking at their previous purchases and rated items, helped transform the company from an online bookseller to a dominant global retailer.
2. Implement a circular economic model that reuses materials.
Business models that include some recollection and reuse of materials not only help boost a company’s brand image with consumers, but also advance a circular economic model that avoids waste. This way, businesses can efficiently manage cost while simultaneously making the business more environmentally sustainable.
3. Share and prosper.
With just a glance outside your office, it’s likely that the explosion of so-called “shared asset business models” is all around you. Shared asset ownership, from ridesharing services to lodging services, decreases the total cost of ownership for the company by allowing multiple people to use an individual product – like a time share vacation condo or a personal vehicle. Cost, efficiency and environmental concerns are all driving this trend, which is showing no signs of slowing.
4. Pay only when you play.
Usage-based pricing not only meets existing demand for products and services, it creates them. New services are popping up every day to deliver your dry cleaning or pick up your groceries – tasks you previously might have sacrificed valuable time to accomplish.
Companies like these recognize the power in capitalizing on time constraints by matching people who need tasks done with others who have free time and want to make some extra money. With fewer overhead costs (like office space or full-time employees), these businesses remain nimble to meet changing demand.
5. Track and adapt your supply chain.
Supply chains are increasingly operating on a global scale, making them more vulnerable to risk. Accidents like the warehouse explosions in Tianjin, China, present dangers to the supply chains of U.S. companies that have factories and distribution centers in this region. Since it’s nearly impossible to mitigate this risk on a global scale, effective supply chain monitoring is mission critical.
Consider one of the best-known global delivery services companies, which delivers packages to 220 countries and territories, representing approximately 2.2 billion transactions a day. This company launched a real-time tracking system in the 1980s, pioneering the idea that location data is as important as the package itself. This system allowed customers to track packages in real-time – soon, the packages themselves will be able to transmit data about their exact location.
6. Mine that data.
While technology offers companies tremendous amounts of valuable data and analytics, many businesses struggle to use it effectively, such as managing inventory or labor. A popular international fashion chain does an excellent job of using analytics for successful innovation by relying on agile organizational designs. By closely monitoring shoppers’ feedback and using it to inform its clothing inventory, it can more quickly and easily release new designs to meet customer demand. The company’s strategy keeps it agile so it can stay on top of trends and release fresh designs consumers love, thus helping drive additional sales.
The ability to consistently win in business is becoming a high-stakes game, with both winners and losers inevitably exposed in an increasingly visible global stage. For business leaders looking to come out on top, the Six Degrees of Innovation is a crucial guide to success.