How Innovative Business Leaders Identify and Realize Opportunities
I have worked for businesses of varying sizes in numerous industries, and have often found myself wondering how innovators generate breakthrough ideas.
For example, how did Kiichiro Toyoda come up with the Toyota Production System? How do innovators discover great new opportunities that others fail to see? How did the greatest innovators in the world such as Elon Musk (Tesla, SpaceX), Jack Dorsey (Twitter), and Garrett Camp (Uber, StumbleUpon) develop their revolutionary ideas?
In my experience, innovative new ideas come from a fresh set of eyes, special project teams, and regularly reviewing processes. However, there must be more to it. There must be a fundamental approach that innovators take to generate innovative new ideas.
Related Blog: Disruptive Innovation: How to Find and Flourish in a Blue Ocean
The 4 Central Skills of Innovative Business Leaders
Recently, I read Rowan Gibson’s The Four Lenses of Innovation: A Power Tool for Creative Thinking. The book explores how the world’s top innovators came up with their game-changing ideas.
By asking the world’s top innovators what their secrets to success are, Gibson identified four common perspectives that enable innovators to discover novel opportunities for business growth. According to Gibson, the four factors most important to innovation include:
1. Openly Challenging the Status Quo
Question common assumptions and dominant conventions within your field, company, and industry
- Many “normal” ways of doing things are outdated, unnecessary, inefficient, or wrong.
- Innovators tend to be contrarians and nonconformists.
- Some of the greatest innovators of all time were misfits that challenged the status quo, seeing things differently from others like Martin Luther King, John Lennon, Thomas Edison, Albert Einstein, and Alan Turing.
2. Quickly Harnessing Newly Emerging Trends
Identify shifts and discontinuities, now and in the future.
- Regularly ask yourself how your business may fundamentally change over the next 5-10 years.
- Frequently conduct industry and market research to help support your own speculations.
- Brainstorm significant growth opportunities that may open up as a result of growing trends.
- CEO of Netflix, Reed Hastings, wasn’t the only person that could see that Internet video streaming was increasing in popularity, but he changed his entire business from home DVD delivery to Internet streaming, taking the risk to harness a new trend.
3. Leveraging Resources and Relationships
Think of your firm as a portfolio of skills and assets, not just as a provider of specific products or services.
- By observing your company as a collection of core competencies and strategic opportunities rather than an organizational chart or separate business units, you can leverage them into new growth opportunities.
- Focus on your employees’ skills and unique capabilities and your company owns such as proprietary technologies, infrastructure, brands, etc.
- There are often many new profitable spaces that your company can enter by leveraging its existing resources.
- ESPN leveraged their core competencies in sports coverage and close relationships with franchises to add new TV channels, radio stations, video games, films, and clothing lines to their offerings.
4. Understanding Needs of the Target Audience
Learn to live inside the customer’s skin; identify unmet needs and try to address them.
- It’s very important for innovators to empathize with customers and gain their perspective to capitalize on new opportunities.
- Always ask yourself what new services or products would fill a void in the market.
- Steve Jobs didn’t focus on selling what Apple already produced, but focused on innovating existing products and developing new products based on customer needs.
How Beats by Dre Used Innovation to Succeed in the Electronics Market
There are many examples of innovators utilizing these business perspectives to succeed in competitive industries. One that I’m personally knowledgeable about is the success of Beats by Dre (Beats Electronics).
Beats by Dre revolutionized the way people listen to music by questioning why music lovers used cheap earbuds. They identified that there was an underserviced headphone market and stepped in to fill the void with high-quality, celebrity-endorsed products. Although at first it may not have seemed like a strong strategy, Beats Electronics used the innovative competencies above to guide their execution plan:
- Beats Electronics successfully harnessed the premium headphones trend. Today, premium headphones make up 40% of all headphones sales, and Beats by Dre owns over 60% of the premium headphones market.
- Beats Electronics leveraged its core competencies in music and relationships in the music business to enter the car audio market, and is now available in Chrysler, Fiat, and Dodge vehicles.
- Beats understood the needs of their customers, because even though there were thousands of headphones available that customers were content with, there was potential in the market for high performance headphones.
- Founders and employees of the company thought of themselves as customers, and realized that there must be a better way to listen to music. Beats by Dre became so successful that it was purchased by Apple for $3 billion in 2014.
By using the four lenses of innovation, companies can improve their innovative culture and individuals can become more creative. Challenge yourself and your business to become more innovative by examining challenges with new perspectives.
“People don’t want to buy a quarter inch drill, they want a quarter inch hole.”
– Theodore Levitt
Discussing new perspectives, like Theodore Levitt’s above statement, can fundamentally change your thought processes and facilitate creative, innovative thinking. Continue challenging yourself, your business, and your perceptions about the world around you to tap into that rare but valuable innovative mind set.
Recent Innovation News and Canadian Government Funding Programs:
- Newfoundland and Labrador (NL) Budget 2023: New Funding for Economic Growth and Sustainability
- Government of Canada Invests Additional $750M in Funding for Canadian Innovation Clusters
- Canadian Cleantech Innovation: Confronting the Climate Crisis
- What Are The OITC, OBRITC, and ORDTC Provincial SR&ED Tax Credits?
- Is Your Alberta Business Eligible for the Innovation Employment Grant (IEG) and SR&ED Tax Credits?