Saturday 21 April 2018

Innovation means doing what's best for customers

Catchphrases like new technology and digital sound good but often it is the simple things that, done correctly, have the greatest impact

Peter Flanagan

Peter Flanagan

FOR a man dealing with the press at 8am, Charles Leadbeater is in pretty good form. The innovation consultant and author is in Dublin to speak at a Microsoft event, and while he is used to traversing the globe – it can't be easy to be wide awake and enthusiastic at that time of the morning.

He is in a business that has become front and centre in recent years. A former journalist, he now works as a writer and consultant, advising companies and governments, including Britain's under Tony Blair, on how to drive innovation in business and politics.

As the downturn continues to linger in Europe and beyond, companies and governments are looking to innovation to drive a recovery. Just look at our own Government repeatedly highlighting Ireland as an "Innovation Island" among other phrases. But what does that mean exactly? On the face of it, it is more a meaningless phrase that sounds good but has little impact. Mr Leadbeater can see that point of view.

"It has become a sort of religion," he claims accurately.

"People want to believe in it but often misunderstand it and believe innovation to be just about new technology and digital and so forth.

"My view, however, is that it is about creating new ways of doing things which deliver value for customers.

"Sometimes it's about new technology, but often it is not. If you have something new that doesn't work it makes no difference how fancy it is.

"Take a company like Ryanair. Like them or loathe them, through a relentless process of innovation they have driven down the cost of flying. The same can be said for Ikea's approach to self-built furniture. These aren't huge technology leaps, but they have changed the way we do business," he adds.

In words that may not be welcome to the Government and its apparent obsession with hi-tech industries, Mr Leadbeater points out that the use of new technology often drives companies in the wrong direction.

"Thinking of it as a technological leap is often a mistake and companies will buy technology and think they are innovating when in fact they haven't changed. It's something firms need to be aware of."

One of the ideas Mr Leadbeater is best known for is the "Pro-Am Revolution", a phrase he coined in a 2004 report he co-wrote. In essence it means that individuals are driving innovation by taking products from big companies and tweaking them as they require.

"The traditional view of innovation grew out of the likes of Thomas Edison and these guys. The basic premise was you get scientists and engineers in their labs. They make something, and then consumers use it and everything is great.

"In that scenario the consumers are pretty passive and that's a misconception of how it happens.

"Take the car. Ford pioneered the mass manufacturing of the car, but it was an incredibly basic product, so many of the first innovations such as the glove box, seat belts, heaters, and radios came from people adapting it for their own needs.

"Now, if you take that forward to computers, software and mobile, you get a situation where the business model is the sooner you get the product out there, the quicker you learn how people want to use it.

Customers who are rapidly learning in some kind of way will do things better. The opportunities for companies come from these very committed customers and amateurs.

"If you take consumers adapting products and spotting markets, then link it up with mobile, you can see that there will be many more opportunities for people to create new things," he adds.

This scenario creates an obvious challenge for companies, and at the moment many big firms are caught between whether to embrace this change or keep it at arm's length. Mr Leadbeater is clear that they must take it on board.

"If they don't, they will miss ideas, annoy people and lose loyalty. Take computer games, for example. If you can get a million players and you get 1pc to contribute that's 10,000 people so that is potentially very valuable resource for any business."

The rise of the Pro-Am activist has come so quickly that it is fundamentally changing how companies roll out new products, says Mr Leadbeater. While before products were tested to the Nth degree and took ages to be developed. Now, many firms are launching items quickly, seeing the reaction, and seeing how customers are using and adapting their products.

This is creating challenges for big companies and governments, especially in companies, like Microsoft, which earn huge income from a few venerable products like Windows and Office.

"Incumbent culture is a big problem," he confirms.

"Doing things in a new way is very risky but the public sector has it even more. "How you shape that for people is a big challenge. In Microsoft's case, they have really taken chances with the likes of Windows 8 and Mobile and so on. That is really to be admired in a company of that scale," he adds.

The public sector has a similar issue, he believes, but there is less will to break up a system that has been in place for decades. With so many people in positions of power, there is little incentive to change, even though there is a huge need to innovate in the sector.

Talk of the public sector brings us to Mr Leadbeater's time as an adviser to Tony Blair's government. His description of Blair as "completely beguiling" and "charming" will be familiar to anyone who has read about the man.

"A friend of mine worked for Tony, left, and came back. When I asked him why he went back, he said: 'Once I sat down on the couch where Blair did most of his business, I couldn't leave' and that sums Blair up very well. He could see the big picture very quickly, but that had a flipside where he didn't really do detail.

"The problem with any politician is they are either in crisis mode or attending summits, and so there is very little time to actually achieve things and if you try to do too much you can get pulled every way and then get nothing done.

"The truth is you can probably only do two or three things and if you spread yourself too thinly you get taken apart by the government machine, which has a quite strong tendency to maintain the status quo," he adds.

It's fair to say Mr Leadbeater is in a "different" career to most people. A former business journalist, he makes no secret of the fact that he misses chasing a big story, but is clearly happy where he is.

"It got to a point where I was working for the 'London Independent' and on paper I had a great job but I was immersed in managing budgets and so on and not actually reporting, so I was looking for a change and it has moved from there."

At 54, Mr Leadbeater is clear he won't be slowing down his routine anytime soon.

"The nature of my work has changed a lot now to the point where it is a lot in the Middle East and Latin America so I'm travelling a lot, while also working on my next book 'The Frugal Innovator'. So I'm kept busy.

"In my experience, when you go after the money, you tend to hit a dead end but if you follow what you love the rewards do come, so I try to stick by that."

Irish Independent

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