Lessons in Innovation From a Retailer

Now let me ask you a very important question. Please think well and through before you answer this:

  1. What happens if you are forced to put an expiry date on every product or service that you create?
  2. What if you have to take the product or service off your price list at the end of the expiry date, irrespective of how well the product or service did business for you..

Now, if your business is like any other business that I know of, this is a scary thought.. Scary enough to start thinking about bankruptcy..

However, this is exactly what Zara has been doing for a while now and doing it really well. Designers turn out about 30000 designs that are productized every year. The time they take to introduce a product in the market from design is 3 weeks compared to the industry average of 6 months.

So, how will you change your approach to product or service design if you are mandated that any and all products/services that you create will have a date beyond which it will not be available for sale, which means that in order to stay in business, you need to have the next product or service already available before the existing product or service goes out of business.

This also means that you throw out the notion of “Cash cows” and “rising stars” if you know what I mean.

If I were in such a situation, my approach to running the business would be as below:

  1. Identify a target customer.
  2. Identify a challenge that they face and one that you could solve for them.
  3. Go about your research and find ways to solve it.
  4. Design a product or a service or a combination to solve it.
  5. Define a deadline by which the product or service will remain available for the customer to use.
  6. Handover the product or service to the delivery team who will sell and deliver it.
  7. Deliver the product or service to customers who want to consume this.

Somewhere in during step 3, you start step 1 again. So, that by the time you need a product or service, there is already a pipeline of ideas on what challenges do you want to solve and for which customers.

Everyone (including your customers) in the organization knows their role clearly.

  • The product design team needs to continuously keep looking to create new product opportunities by addressing specific challenges.
  • The marketing team knows exactly what challenge is being solved and for whom, hopefully which results in appropriate messaging.
  • The delivery (& sales) teams know that they have a very specific time window to sell, post which the product will no longer be available.
  • Customers know that if they want to address the challenge, they need to decide fast and adopt. The solution is no longer available for a future purchase, which results in no decision to buy a lot of times.

This could also be compared to the lean start-up methodology propagated by Eric Reis as well. Only difference, this could be adopted by large and small businesses alike.

This is also like heart beats, beating to a rhythm, regularly, one after the other.

Some products or services will work well, some will fail miserably and some will be average. That is not the point. The point is that you will focus on solving more and more challenges than on betting on one big idea, which if fails (and believe me a lot of them will fail) could be devastating to the business.

You just learn from the iteration and move on. Keeping the heart beating is critical.

This process also kicks out a lot of activities and throws them out of the business. Activities like

  • Business plan and approval process to get funding for a new product.
  • Forecasting process for expected sales.
  • Long term business planning at the start of the year (plans that will bite the dust with the first contact with the market).

This will also reduce the risk for your organization..

This enables your organization to outwit your competition to the extent that you will find that the only team that you are competing with is yourself.

Everyone else will try to play catch-up but will never be able to do that. Isn’t that a good position to be in?

Question is not if you think this is doable, question is do you have a choice?

Do let me know your thoughts by commenting below or tweet your thoughts to me at @rmukeshgupta.

PS:

More Business articles from Business 2 Community:

Loading...
See all articles from Business 2 Community

Friend's Activity