3 Business Models for Building Systemic Innovation

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It’s an overused word, and some grimace at how often it’s brought up, but innovation is once again the word of the day. And for good reason. In marketing, customers control more of the decision cycle because of ubiquitous access to more and more data. This access comes from a growing array of devices that shape how they engage based on their personal preferences. For product developers, upstart companies have as much access to enabling technologies as the big boys, and because of their agility advantage, can bring great products to market faster that better serve customers’ unmet needs. In both cases, innovation has become an imperative not just for growth, but for sustaining a viable business.

There are three ways businesses can build innovation into the way they come to market:

The learn-on-the job model

Dedicate an annual budget for innovation, but grant proceeds from the budget to teams who need to learn or expand a skill set to improve the business. Paying for this important overhead in this way grows the top line without stealing from the bottom line.

Example: We took a mobile application we developed for our Interplay client-appreciation conference and paid for its expansion, migration to a better platform and feature enhancements with our own “Labs” budget. The result is a far better application we can now offer to clients and use to facilitate better networking and internal communications at our future events.

The experience-expertise convergence model

Business line managers with experience in what works and subject matter experts with acumen in how to make it work need to formally and regularly collaborate as a single team around business problems. Innovative ideas produced by this team, unlike those produced in silos, don’t depend on theory, as they are proven to produce results, and are able to be immediately implemented.

Example: Our Technology and Telecommunications industry team asked our marketing team to work with them to develop a social media offering for their clients. The resulting collaboration produced a methodology we call “Beyond Awareness” that has energized top clients for its focused, highly relevant use of social media for improving operations, internal communications and faster problem solving.

The predictive insights model

The market research function in companies adept at identifying consumer “behaviors” need to add analysis of consumer “needs” and “attitudes.” Insights into these areas produce actionable segmentations that provide the answers to “why” consumers buy, and set the stage for predicting why they will or won’t respond to a new product offering or marketing program.

Example: We uncovered that cruise passengers need to feel a personal connection to the trip they’re planning, and they see advertising as inauthentic and impersonal. Using these insights we predicted (for a major cruise line) that their customers would respond better to personalized video enhancements to their regular CRM. The resulting audio and video email we delivered improved cruise booking rates by 400% for an inconsequential increase in cost.

Regardless of how a business chooses to innovate, it’s become imperative to add this competency into operations in order to stay competitive in today’s rapidly evolving market. The good news is that most businesses have the raw materials – they simply need to select the right model to turn their competency into actions that tune their operations to produce better results.


  1. Doug Klein says:

    I’m curious as to whether others have different innovation models that have been successful for them. Post them here in Comments if you do. I’d love to hear more.

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