Jan Van Veen, founder of moreMomentum, outlines a crucial approach he has been developing within his peer-sharing community to help service organisations grow through innovation and diversification…

Manufacturers with a narrow innovation focus miss many opportunities, see more innovations fail, often see that competitors do exactly the same thing and struggle to turn their innovations into growing revenues and margins.

Leading and successful manufacturers cover a much wider scope of innovations than those that stagnate and fall behind competition. They actively search for opportunities to improve the value they promise their clients, how they deliver the value and how they capture part of the value. 

They find and launch more innovations for growth. Sounds like a good recipe, doesn’t it?

The problem: Too narrow innovation

Many manufacturers have a too narrow focus on their innovations. Their dominant focus is on improving features and functionality of the products they sell. An increasing portion of the manufacturers also improve their services, but are still focusing on break-fix and maintenance services.

There are major disadvantages of the narrow innovation focus:

As a result, they not only fall behind competition. In today’s rapidly changing industries, they ultimately run the risk of be pushed down the “food chain”, stagnate or even become obsolete. This is pretty frustrating, but does not have to be like that.

How Many Manufacturers Struggle to Grow with IoT

A common struggle is to drive growth and monetise new remote capabilities.  Most manufacturers focus predominately on predictive maintenance, remote diagnostics and remote resolution. The aim is to increase the value they offer to clients by improving uptime of their equipment and the resolution time if a failure occurs.

They encounter the following typical challenges:

Solution: Search along 21 innovation tracks

Leading and innovative manufacturers have a pretty broad range of areas in which they innovate for growth. They are more open to new domains, new business models and new perspectives which enables them to adapt and

In our research, we have identified 21 innovation tracks for growth, spread over 3 clusters. You can thrive in today’s disruptive world and achieve sustainable growth by widening your scope of innovation along these 21 tracks and by making strong and coherent combinations in each innovation.

Just like the leading innovators, make it a habit to embed these 21 tracks firmly in your innovation strategy:

The three clusters of the 21 tracks are;

Which problems or needs do you solve for which customer segments? Your growth opportunities are in solving more or other problems of your existing clients and expanding the market you serve. Alternatively, instead of expanding on scope and market, you could also specialise more in a specific niche of customer segments and needs and become the market leader in that niche. This cluster of innovation tracks also includes developing your brand to better articulate and expose the value you provide.  

2. How you deliver the value

Which activities and capabilities do you need to deliver the promised value to your clients? Your growth opportunities are in building and improving the capabilities to deliver the value in an effective, efficient and consistent way, so clients get and see the value.

3. How you capture part of the value

Which portion of the value you create and deliver do you capture? So how and how much are you being paid for the value you deliver? This involves your pricing model, earnings model and your position in the value chain. Successful and innovative companies always have these three clusters – value.

A few examples of how the various tracks are embedded in their strategy;

Back To Iot – The Opportunity

Once you have the sensors in your equipment, the infrastructure for connectivity and data and the capabilities to turn data into valuable insights, there are many opportunities to enrich your innovations and business model and hence dramatically improve the potential for your clients and your own business. To mention only a few:

For sustainable success in today’s rapidly changing world, there is no single silver bullet. A great product or great service will not bring much value. To thrive in these disruptive times, you need diversity in your business innovation with initiatives in different innovation tracks as well as initiatives with a rich and coherent set of innovation tracks. That way, you will launch innovations which:

It contains: