Businesses That Innovate
What businesses can we generate innovation with, and why does it work ?
For over 6 years now, Souffl has been creating new businesses, products, and services and helping to design significant innovations. This endeavor, along with our reflections on how to promote successful innovation, has led us to where we are today. 2021 presents the opportunity for Souffl — through a series of articles — to share our experience, revisit our approach to innovation, and understand why some innovation projects succeed while others fail. In this second installment, (the first was dedicated to Entrepreneurial Leaders) we are going to focus on businesses that innovate and why we enjoy working together.
When and only when.
In the last few years, the vast majority of large companies have created an innovation division. That said, not many have done so with the primary goal of generating innovation. This becomes possible when and only when innovation is enshrined in a company’s roadmap and strategic plan.
Many businesses treat innovation as an opportunity to produce collective energy. In fact, they more often generate improvement as opposed to true innovation. They may indeed assemble special teams and allocate funds to it, but their reflections are incomplete or shortsighted, resulting in a period of disillusionment. An umpteenth product launch is not an innovation — it’s simply another expression of the same traditional business model.
Businesses with a framework truly conducive to inventing, creating, and innovating are very rare. It’s important to recognize that design and innovation are only possible when everything else is already in place.
It isn’t just a matter of “doing innovation” — the partner company must want to commit to generating innovation, and make it one of their strategic objectives.
Once the right teams have been set up, financial investment is required to develop and launch stand-alone entrepreneurial projects. This is true whether they are internal and carried out with partners, or external and activated through venture funds.
In effect, to create the right conditions for innovation, a company must devote financial resources, develop specific processes, and give teams some leeway.
Broaden the field of view.
The initial goal is never to create a disruption, but simply to solve a problem in the best way possible. In fact, this frequently involves creating new business models.
A company that is capable of innovating knows it must broaden its field of view. It sees itself as an actor within an ecosystem, within shifting playing fields. It knows how to go beyond its primary business, market position, and usual value chain. It becomes more than an economic stakeholder and incorporates its social and environmental impact into its strategy. Finally — and this is crucial — it determines its competitive landscape on the basis of the customer and their usage rather than the offer. It is a matter of understanding habits, uses, aspirations, and needs as yet unexpressed. The customer experience needs to be examined beyond the simple concept of a journey. It is important to try to gain a nuanced understanding of customers’ lives and experiences while also taking an interest in non-customers.
To create innovation, we aim to break down a problem. We address it systemically by transcending the company’s only perspective on its main business and value chain. An athletic footwear company developing a technology to collect biometric data from the runner via their soles could, for example, enter the healthcare market, as they are generating data that can be analyzed and angled. In this way, the company has realized that by developing something new, it can position itself in new markets. This is an example of disruptive innovation.
It is no longer just a matter of offering an upgraded product to meet an assumed need; it is also about inventing something on the basis of actual needs on the ground, and then exceeding users’ expectations. This is how we started with the issue of young urbanites on the move experiencing isolation and co-invented a new shared-housing model. For the company Compose, we designed a comprehensive ecosystem that goes beyond the now standard co-living model. → Compose case.
Maturity.
To innovate is to invent, to search for something new, even when you do not know what it is yet. In this process, we rely on our culture, history, and expertise. To understand these topics, you need to have experienced and analyzed them.
The difference is in the company’s level of maturity and its ability to understand its market. In order to innovate, the company must follow a learning curve and take a number of steps. Before financial resources, the company’s maturity is what must be developed. It is the number of actions undertaken and the time spent positioning itself to learn, drawing lessons, and setting up projects.
Our job is to reveal the company’s core business. It can then adopt an entirely new vision and easily shift from one topic to the next, switch gears and transition to new markets.
For example, we believe the core business of the horseracing media group Paris Turf is data. This led us to co-develop a unique athletic tracking solution for racehorse trainers.
We go so far as to blend disruptive innovation with radical innovation if we believe this is the best way to create value.
Disruptive innovation produces an innovation, which creates a new business model that redefines the market. The most striking example is Tesla, which not only sells cars but also, and above all, provides a circular ecosystem.
Radical innovation, on the other hand, involves a technological leap that renders the previous technology obsolete. For instance, this applies to the transition from recording via physical medium to cloud recording.
A perfect blend of the two is our holy grail — it’s what we find most appealing. And what sets us apart is that we are conscious of this.
The designer’s eye.
The deliverables of design are no longer the same, and companies have finally incorporated what designers have been saying all along. Where there was once talk of specification features and aesthetics, now it is all about user experience.
The role of design has shifted. It has gone from “surface-level and at the end” to “central and at the start of the project”.
Indeed, it is a new way of approaching business.
Ultimately, the businesses that innovate and that we feel the closest to are the ones that, consciously or not, adopt the behaviors or attitude of a designer. They have sincere intentions and a vision of their business that is more focused on the need they are satisfying than on their products.
These are companies that reflect on modes: how to help people get around, live in their city, and educate themselves. Their legitimacy also resides in this search for meaning. Like designers, they look ahead, capable of anticipating and learning about other fields, other professions.
If Kodak had decided its business was about helping people keep and make images rather than seeing itself as a manufacturer of photographic film, it probably wouldn’t have jeopardized its existence like it did in the late ‘90s.
Removing silos.
An interdisciplinary approach generates different ways of thinking. An engineer certainly doesn’t think like a designer, but their work can be complementary and creative. This becomes possible once you remove silos.
Innovation is impossible in companies that operate in silos. These are companies that have a traditional vision wherein the same profiles are always hired for the same roles, with no openness to other businesses, no capacity to ask certain questions. It just doesn’t work! They have to start collaborating more subtly, not simply acting as clients or suppliers to each other.
Innovative companies share a certain quality with the Bauhaus movement, specifically that notion of putting all the professions together, and then going about searching and asking questions. They do not limit themselves to perspectives based solely on business, technology, or reliability, and they have a desire to offer different things, to make beautiful things, and most of all, to consider the user.
Conclusion.
Innovation isn’t an easy subject; it requires a certain culture, a maturity, and a special organization of the people, processes, and methods to be established. The ultimate goal is to answer questions that frequently remain unasked or beneath the surface and that relevant businesses and teams could consider. Achieving this goal requires you to have a certain degree of maturity, or otherwise give sufficient leeway to more mature structures.
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This article drew on conversations between Souffl cofounders Nicolas Baumgartner, Arnaud Carrette, Fabien Fumeron, and Bernard Simoni, a profiler and analyst with Souffl.
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@Nicolas Baumgartner @Arnaud Carrette @Fabien Fumeron @Bernard Simoni @souffl
