Innovation type 4: Structural
If you are a manufacturer or retailer you might be missing out on some great opportunities to build on your brand in ways that you have never previously thought of.
It's what used to be called 'sweating your assets' but for some reason businesses often get stuck in a routine of what they've always done and forget to look at what they could achieve with a little innovative thinking.
If you're incurring high levels of fixed costs with your facilities it makes sense to see if you could put them to use in new and different ways. A particularly intricate or complex way of producing your existing products might be transferable to an entirely new market sector, that not only extends the reach of your brand but could also be more profitable.
Similarly, if you are stuck with retail premises that you cannot (or don't want to) exit it's worth having a think about new ways of attracting customer footfall with very different propositions. The Waterstones model of opening up cafes in book shops is a good example of how thinking from a consumer's point of view and developing a more engaging concept than simply selling books created a model that is frequently copied. The example of Costa having books available to read in their coffee shops shows how this idea can be reversed too.
So what is Structural Innovation?
Essentially it is an approach that allows your business to enter a totally new market, but importantly uses your existing skills, expertise or facilities to do so.
Sometimes there are obvious synergies that aren't difficult to implement. The numerous distilleries piling into production of hand sanitisers is a good example of this.
However, true Structural innovation is focused on long term opportunities that bring incremental growth and profitability rather than the more reactive (though highly commendable) short term repurposing of facilities to provide some much needed goods and equipment to the NHS.
Naturally, this can potentially be more accessible to companies with a manufacturing site, but isn’t exclusively so, and the opportunities for collaboration between partners bringing different skills and capabilities can be very exciting. There have been some great examples of this more collaborative approach during the COVID-19 crisis with Formula 1 engineers and vacuum designers working with partners on new ventilator systems.
From a more defensive point of view, it can also allow businesses to pivot away from declining markets that they are dependent upon, and discover new and more future-focused sectors that ensure their longer term survival.
You’ll find an interesting example of Structural innovation in the Stories section of my website, where a centuries-old brand uncovered an opportunity for a highly distinctive extension to its operations in a higher profit market.
You also might want to think about other types of innovation – for example Disruptive innovation - to focus your future activity and investment, use your existing sector expertise, and balance your risk.
If you aren't sure about which type of innovation would suit your business, why not have a go with my interactive Innovation quiz (www.helencooper.com/innovation-quiz-1) to see if you could also be thinking about launches that make the most of your unique expertise.