Innovating faster to enhance customer experience

There has been an increasing trend towards shortening product life cycle across industries like software, smartphones, cars or even apparels (fashion). How does a company achieve such short cycles. What makes them innovate faster?

Global digital native companies (like Facebook, Amazon, Google etc.) have had these processes and technologies in place for years, to support faster release of their products. (e.g. in 2015, Amazon developers were releasing new version of software every second!)

We see a momentum to emulate the speed, dynamism, and customer centricity of digital natives by established (i.e. non-digital) businesses across sectors globally.

Some of the common key ingredients that we observe across industries for companies who have successfully shortenedinnovation cycles include:

Digital technologies (data, cloud, analytics) combined with the agility of an organization paves a way for faster delivery of products and services when adopted in a company with an inclusive culture that allows experimentation. This helps companies to understand the customer better & innovate faster.

These ingredients can help innovation in any industry (digital native or established). Let’s take the example of Zara (a fashion retailer). Digital technologies allow Zara’s product teams to understand trends in fashion based on customer interactions at each store.

Combination of technology, organization process and agile supply chain allows them to come up with a product that is designed and stocked in international stores just in 20 days! The culture of experimentation allows them to cope up with ever-changing fashion trends (Zara discards over 50% of apparel design on average).

The true impact of digital technologies is that they are lowering the costs of experiments and expanding the reach of those who can participate in experiments. Take again the example of the serial house of cards.

Netflix has real-time access to sentiments of viewers from across the globe. Netflix uses data, analytics and connectivity to examine millions of plays per day. It also knows every time a viewer pauses, fast forwards, rewinds, or rates a show.

This helps Netflix to understand (and predict) the level of interest of viewers for practically any show. Thisunderstanding of user liking / interest has made it possible to produce series like “House of Cards”.

The examples above show how rapidly companies can innovateproducts and services they offer to customers. This becomes a fundamental source of ongoing competitive advantage in any industry be it entertainment, apparel or digital.

Let us see how above ingredients help in reducing innovationcycles. Conceptually a traditional organization can be divided in 3 layers:

Traditional organizations had lengthy processes to get customer feedback. The connect with customers was mostly with product management through customer feedback or interactions. And sometimes senior management was involved in an interaction with customers too.

Digital technologies allow each layer of the organization, to understand customer needs. Digital organizations have free flow of communication among all  3 layers. Properly collected data can help all layers of an organization to understand customer needs better.

It is the culture that ensures a free flow of communication across 3 layers (above figure) of an organization and helps to develop the capability for experimentation. The culture of accountability & experimentation without fear of failure drives innovation both at a product/service and operational level.

In summary, data, connectivity and analytics are the foundation for any modern organization in any industry. But they are not enough for faster innovation. It is the proper flow of data across all 3 layers of the organization that helps them to respond to customer needs at a faster pace.

The culture of experimentation helps to come up with innovative products / services. And finally, when we are experimenting for innovation, it is OK to fail & discard some outcome.

• Sujal Shah, Director, Software Organisation, Barco India