Everyday Innovation — Small Steps for Big Increases in Bottom Line Profits

by Bob Serling

Everyone loves a big, shining success story. Small company invents a revolutionary technology, creates a new business category, goes public at a valuation of billions, and assumes its rightful place in the history of business success.

Trouble is, success stories of this magnitude are few and far between. And these sorts of ventures are incredibly risky, not to mention that they require the good fortune of being able to identify an ingenious product or service that was previously nonexistent, then convince millions of customers that they really need it.

Disruptive ideas that spawn an entire new business category are great, but you can't rely on being able to create one — or being able to capitalize on it if you do create one. The bankruptcy courts are littered with entrepreneurs who made the fatal mistake of believing they had discovered the next big thing.

Not all innovation needs to be earth shattering

While it may not be as glamorous as a big, disruptive idea that cuts a path through the pages of business history, there is another form of innovation that can substantially increase the bottom line of any business. This is the type of innovation that leads to smaller, continuous improvements of products and services. I refer to these types of improvements as everyday innovation.

The beauty of everyday innovation is that it is far easier to do, and do well, than disruptive innovation. At the core of this process is the ability to look at things in a slightly different light in order to fit pieces together where they didn't seem to fit before. Or, as Mark Twain once said:

"Wit is the sudden marriage of ideas which, before their union, were not perceived to have any relation."

The goal is to find gaps that aren't being filled, either by your product, a competitor's product, or some other aspect of your business that will give you a significant advantage over all your competition. I'll show you how to do effective gap analysis and give you some real life examples in just a moment.

Another advantage of everyday innovation is that it flies beneath the radar. Disruptive innovation creates a huge, noticeable rumble. Everyday innovation creates a small ripple. This ripple is undetectable to your competition — until it's too late to do anything about it.

So how to you become adept at creating everyday innovations that can give you a tremendous competitive advantage? To answer this question, let's take a look at one of the pioneers of creative thinking...

Tarzan the Innovator

It's a hot, muggy day in the deepest jungles of Africa. A young Tarzan is puttering around the tree house, carving a coconut shell into a doorstop and clearing away low-hanging vines that block the entrance to his hut in the sky. Suddenly, the peaceful hum of the jungle canopy is interrupted by the shrill, tense shrieking of Tarzan's faithful companion, Cheetah. The chimp is beside himself, jumping up and down, pounding his head and chest and frantically motioning for Tarzan to come with him.

As Tarzan reaches the door of the tree house, he immediately sees the source of Cheetah's anguish. Fifty yards away, Tarzan's beloved mate, Jane, is hanging precariously from the lowest limb of a bushwillow tree. On the ground below her is a male lion, repeatedly leaping within inches of knocking Jane out of the tree. It won't be long before the lion captures his prey.

Tarzan realizes he must do something — and do it quickly — if he is to save Jane from the lion's claws. He looks around to quickly assess the situation. "I can't hit the beast with my knife from here," he reasons. "And I could miss the lion and hit Jane instead."

"I'm an excellent swimmer, but there's no water between my tree house and the bushwillow tree, so that's out. I'm a fast runner, but that dang lion is getting closer and closer. I doubt I have time to climb down my tree and run over to battle the lion. Not to mention that I still have a huge scar on my left thigh from the last time I fought a lion. What in the heck am I going to do to save poor Jane without becoming lunch meat myself?" Tarzan wonders.

Then it hits him. In a flash of inspiration, Tarzan realizes those pesky vines he was clearing are the solution to his problem. He whirls, grabs the sturdiest vine he can find, and pushes off from the tree house. Within seconds, he has shot from his tree house to the bushwillow where Jane is clinging for her life.

Tarzan sweeps Jane up with one strong arm, pushes off the sturdy trunk of the bushwillow to switch directions, and a few seconds later, he and Jane are safely back in their tree house.

A perfect example of everyday innovation in action.

Examining Tarzan's methodology

The process Tarzan just went through has all the components for applying innovation on a practical, day-to-day level to any business situation. Let's take a look at Tarzan's process in more detail. Here are the steps he followed:

A trigger event
Recognizing a gap
Analysis of the situation
Discovering a lever
Improving your bottom line

These are precisely the steps you can use to innovate incremental improvements to your own products and services, or any other aspect of your business. Let's take a look at the workings of each step, followed by a number of examples of everyday innovation being used by companies to improve their bottom line profits.

Step 1: A trigger event

All innovation is driven by a trigger event. A problem rears its ugly head, a new opportunity is discovered, a competitor releases an improved product that forces you to react, and so on.

In Tarzan's case, the trigger event was Jane being chased up the bushwillow by the king of beasts. However, the drawback to the process as practiced by Tarzan, is that he has no control over the trigger event. So he operates in a reactive mode, rather than exerting more control over how and when he will innovate.

This problem can easily be overcome, allowing you to gain a high degree of control over when and how often you deliberately apply innovation in order to gain an advantage over your competition. I'll show you how this can be accomplished in just a moment.

Step 2: Recognizing a gap

Once a trigger event has occurred, you must then recognize the gap it reveals. For Tarzan, this was quite easy. There is a literal gap of fifty yards between him and Jane.

Recognizing the gap with your own product or service isn't always quite as easy. But here are a few suggestions for places to start. Does your help desk or customer service department track the categories of calls or emails it receives? If not, you should set up a system to do so pronto.

Customer support and service are your direct lines to the real world. They provide you with free, invaluable research. By tracking categories of complaints or requests, you can identify recurring themes that give you powerful opportunities to improve your product or service.

One of the most obvious ways to recognize a gap is when a competitor upgrades their product or offers a new product that outperforms your own. You are now confronted with the problem of what to do to close this gap.

A third way to identify gaps is to pay attention to the trade journals for your industry. What changes are taking place — technology, regulatory, cultural, manufacturing processes — that may force a change in your product or service in the near future? Identifying these trends is crucial to maintaining market share for any business.

Step 3: Analysis of the situation

Once a gap has been identified, you need to find a way to close it. Although this may seem obvious, many companies either bury their head in the sand or come up with an incomplete, shoot-from-the-hip solution that often does more harm than good.

One of the key issues you must analyze is how did the gap occur in the first place without you being aware of it? This is crucial if you're going to avoid being caught in similar situations in the future.

Next, what can you do about this gap? Can you add features to your product that will equal or surpass your competitor's? Better yet, what can you do improve your product that will lock in a proprietary advantage no other competitor can hope to match?

These issues are critical to the ongoing success of your business. As such, they take time to answer properly. You don't want to invest serious time, effort, and money in a half-baked solution. But as you'll see in the examples below, when you take the necessary time to innovate on a regular basis, the results can be exceptional.

Step 4: Discovering a lever

A lever is any instrument, real or perceived, that gives you the ability to close the gap. And hopefully, to seal it off forever. In Tarzan's case, the lever was the vines he had just been trimming.

Fortunately, most situations aren't as dire as Tarzan's. You usually have more than a split-second to consider your options and select the proper lever. However, it's critical that you look beyond your normal frame of reference and expand your list of possibilities when trying to identify the most effective lever. That's what innovation is really about — thinking in different ways in order to come up with different, and more effective, solutions.

Step 5: Improving your bottom line

Once you've identified the proper lever, the final step is to use it to improve your situation. Facing an emergency, Tarzan grabs the vine, lets loose a blood-curdling jungle yodel, and swoops across the chasm to rescue Jane.

But applying everyday innovation in the real world is often more subtle. Without the motivation of a critical problem, many companies don't take advantage of a variety of levers that are available to them. It's important to make sure you're benefiting from the leverage that's available to you on your time and your terms — not just when you're forced to react to a problem that could have been avoided with a bit of foresight.

Everyday innovation in action

Let's take a look at some real world examples of everyday innovation in action. The key points to remember are: (A) while these innovations may be relatively small, the results they produced are substantial; and (B) because they cause a small ripple rather than a large rumble, they are nearly always undetectable by your competition.

It's also important to understand that everyday innovation can be applied to any area of a business from product development, to marketing, operations, finance, manufacturing, customer service, sales, tech support and any other area of your business.

Everyday innovation #1: Kill the messenger

IMC Digital Universe supplies emergency web development services to the Armed Forces and defense contractors. Although they had made inroads into this market, their sales were prone to significant peaks and valleys.

We were originally contacted to assist them in identifying improvements to their messaging. However, in this case, their messaging was just fine and the real lever was yet to be discovered. After evaluating the situation, we realized that because the target prospects were members of the U.S. Senate or Congress, getting through a gauntlet of gate keepers was the real problem.

A bit of shirt-sleeve research revealed that IMC's prospecting methods of sending a letter or fax were hit-and-miss at best. Despite their track record within this market, getting their message passed through the maze of barriers was extremely difficult. So we decided to keep the message and kill the messenger.

Our recommendation was that IMC use a courier service to deliver their message. The implied importance and urgency of this method stood a strong chance of getting IMC's message directly into the hands of their difficult-to-reach prospects. And it worked like a charm.

On its first use, this delivery method generated a reply on the same day from a Congressman's chief of staff. The subsequent meeting produced an immediate agreement in principal for a $25 million contract, substantially exceeding the size of any of IMC's previous contracts. The same method was then used by one of IMC's sales trainees to land a multi-year contract with a Fortune 500 company. And they continued to use this method to great advantage until IMC was acquired by another company.

Everyday innovation #2: Product flipping

Many companies discover that a low-price policy can lead to a less than desirable profit picture. This was the case for one of our clients who specializes in sales training for the insurance industry.

One of the Prospecting and Marketing Institute's most popular offerings was a three-day training program followed by a year of support with a sales counselor from PMI's staff. The fee for this program was just under $700. However, after selling out the program for a number of years, analysis indicated that the program was barely turning a profit. The decision was made to increase the enrollment fee significantly, to $5,000 in order to defray the substantial costs of the one-to-one support.

Research revealed that the component most valued by participants in this program was the year of follow-up support. However, the program was positioned as a 3-day intensive training with the support component being a secondary feature.

The lever was now very clear. We "flipped" the product and restructured it as an in-depth, year-long program with only a minor mention of the three-day training. The program name was changed, the materials remained the same with the exception of a few minor modifications, and it was re-launched in this new format. There was no drop-off in sales whatsoever. All three training sessions that were offered throughout the year continued to sell out. The difference was, now they were selling out at a price increase of over 700%.

Everyday innovation #3: Borrowing credibility

One of the major challenges that faces many companies, particularly start-ups, is establishing a track record that can be leveraged with new prospects. When I was VP of Marketing for an e-learning start-up, Nforma Learning Systems, we were faced with establishing credibility both for our new testing and assessment technology that was unlike other testing formats, and for the company itself.

One of the levers we developed was creating a Board of Advisors comprised of senior executives from recognized e-learning companies and recognized experts in the field. When we were contacted by a major consulting firm to help them solve a problem with a leading financial services company, we thought we had hit the jackpot. After a very productive initial meeting, held on a rush basis at the consulting firm's insistence, we were told that our technology was the perfect solution and they would have their implementation team contact us immediately.

The implementation team never called. And the executive who we met with originally was extremely slow in returning our calls and emails, although he continued to say they were interested in using our technology.

So we sent an email to all of our advisory board members asking if any of them had connections with the consulting firm. As it turned out, one of our advisors who we had least expected to provide much assistance in this case, had a long-term consulting contract with this firm. One call from our advisor to the executive we initially met with resulted in an immediate return call from that executive, and our project was back on track. Our own credibility wasn't enough to close the gap, but the credibility we borrowed from our advisor got the job done.

Everyday innovation #4: Plain white wrapper

When mailing demo disks to a prospect list, most software companies use a glossy self-mailer with advertising copy listing the features and benefits of the product. When Blue Ocean Software engaged us to help improve the open rate on their mailings, we "transported" a tactic from a client in a different industry. One of our clients in the seminar industry had a problem with the cassette tapes they included in their prospecting package being erased by the machinery the post office uses to process mail. They discovered that putting a message on the envelope of "Do not bend or x-ray, magnetic media enclosed," not only solved the problem, but increased their open rate significantly.

Instead of using the industry-standard glossy self-mailer covered with advertising copy, Blue Ocean placed that same mailer in a plain white envelope with the "Do not bend or x-ray" message printed on the front. Their open rate, and sales volume, increased notably.

How to invent your own future

Making everyday innovation a regular part of your business is actually quite easy. All it takes is a shift in perspective toward the trigger events that initiate the process. Instead of waiting for trigger events to occur, you can intentionally create your own triggers.

The best way to uncover a continuous stream of valuable trigger events is to consistently question your products, marketing, understanding of the marketplace, manufacturing processes, operations, financial policies, distribution chain, and every pertinent aspect of your business. The key to your success is the quality of questions you ask yourself and your staff.

The proprietary innovation process we use with our clients includes a list of dozens of potential questions, far too long to list here. But I'll give you a few starter questions we find to be extremely productive for the majority of our clients.

If it was six months from today and we were introducing a new product, or an upgrade to an existing product, that would take the industry by storm, what would that be?
What would stop us in our tracks if a competitor was to do something before we thought of it?
What could we transport from another industry that would benefit us, especially because no one else in our industry is doing this?
What is the worst solution to this problem? Are there any component parts of that lousy solution that can be converted into a powerful lever?

That's a sample of the kind of questions you should be asking on a regular basis if you want to employ everyday innovation to make a significant contribution to your bottom line profits. With the simplicity of the process shown above, and the results you've seen it produce in the examples, the real question is...

Why wait for a trigger event when you can create all the triggers you want and gain a tremendous amount of control over your future?