Better Results for your Best B2B Customers
Imagine, you are the General Manager in a pharmaceutical company. Into your office comes a Division Manager. “You know you asked for ways to improve our relationship with United Hospitals”, she reminds you about the last management meeting. “I’ve got it. We need to innovate for them!” She says with a grin. What’s your reaction?
One way to create value for your best customers is to innovate. But, innovate, and innovation are weasel words. What’s a weasel word? According to Wikipedia, words that appear specific or meaningful, even though they are at best ambiguous and vague; weasel words allow you to deny any specific meaning because the word was never specific. More humorously, Chambers Dictionary describes them as: “words used to bewilder, befuddle and confuse”.
So, if we can create value for our best customers by innovation, how do we innovate? When quizzed, the Division Manager may say, “Everyone knows innovation is three steps” and draw a diagram like this:
“Innovation is generating ideas, prioritising ideas and implementing ideas into a market.” Says the Division Manager with another grin. But the General Manager wisely says, “I need more than an abstract concept. Come back when you have something more concrete.”
Maybe the General Manager knows about a model from Cranfield with five elements organisations need for innovation? As the diagram below shows the three stages for ideas work best when they fit between two boundaries: People and Organisation plus Innovation Strategy.
Watch a 20-minute video on the Pentathlon framework.
We will explain Innovation Strategy and see how it helps the General Manager in the scenario above, and how it helps your best B2B customers.
If Innovation is a weasel word, then how does having an Innovation Strategy help? Start by asking two questions:
What kind of innovation?
How fast do you want the innovation?
1. What Kind of innovation?
What kind of innovation matters? There are at least six kinds of innovation: Product, Application, Process, Experience, Marketing and Business Model.
So, the General Manager should always ask what kind of innovation? Why? Because this will narrow down possible activities, eliminating a wide range of activities and make it easier to keep costs under control.
According to Geoffrey Moore, another reason to know what kind of innovation is different types of innovation suit different times in the product life cycle.
If you want to innovate for your “best B2B customers”, then as General Manager, you can judge whether the proposed type of innovation fits the customer. Also, as General Manager, you can judge if your organisation has expertise in this kind of innovation. For example, if your organisation has expertise in Lean Six Sigma, this is a method of process innovation. In contrast, if your organisation has expertise in mapping customer journeys, this is mainly experience innovation. If your organisation does not have expertise in this kind of innovation, then where are they getting the expertise from, a consulting company?
2. How fast do you want innovation?
This is one of the most powerful questions, and yet it is the question that is asked rarely. When do you want results from innovation? In four weeks, four months or four years? Once you know the timescale for results, you can judge the ideas rapidly. For example, if you wanted to get results in four months and one idea was to create a new department staffed by 20 people. As General Manager, you would know immediately if this was possible in your organisation or your customer's organisation. In our experience, with an organisation of more than 200 people, certainly not possible.
Helping the General Manager and the best B2B customers
Innovation can create value for you and your best B2B customers. However, it’s critical the General Manager chooses the right type of innovation. The right type of innovation fits the product lifecycle of the customer and fits the expertise of your company. Clarifying how fast you want to innovate helps the General Manager judge if the proposed innovation can deliver results in the timescale they want. Or more usefully, defining timescale for results helps the General Manager say no more often to innovations that cannot deliver value in time.