Imagine if you can know with precision who your potential buyer is and the time they will want your offering? What if you are a banker and you could predict which customer will open an account with your bank, so you go ahead and send the forms? Is there such a possibility? Well, Amazon.com thinks there is. That’s what they do with what they call ‘anticipatory shipping’. Back in 2014 Amazon secured a patent for an algorithm-based system that could ship goods before they are even ordered.
Amazon is already extremely efficient, but imagine what they could do if shipping happened before a finalized shopping decision. But, how does Amazon know what you want? Amazon uses a forecasting model based upon prior Amazon activity. Factors such as time on the site, duration of views, links clicked and hovered over, shopping cart activity and wish lists is all taken into consideration. The algorithm also take real-world information and factors into consideration.
What if the predictions are wrong? Amazon created a control system that is able to calculate whether it is worth returning the product to the plant or if it is better to send discounts and promotions to customers in the area where the products are (always a lower value than the cost of returning the product to the plant). The idea is not so far-fetched. It allows offering great deals to customers and making them happy, as well as the liquid stocks are reducing costs and maintaining a complex logistics machine running. Amazon is constantly redefining supply chain management. From their planned drone delivery to go shop, they seek to give customers one thing they want – convenience! The results? A spike in sales volume and market capitalization.
Amazon seems to understand and implement the key factor in business growth – maintaining leadership in today’s highly competitive business world is dependent on how innovative your business is. Leading businesses push the boundaries and maintain their profitability through innovation.
This was what BlackBerry missed that got them crashing. At its peak in September 2013, there were 85 million BlackBerry subscribers worldwide. However, BlackBerry has since lost its dominant position in the market due to the success of the Android and iOS platforms; the same numbers had fallen to 23 million in March 2016. The reason is very simple, BlackBerry Limited took the desire of the market for granted. The world wanted touchscreen, the company was stuck with keyboard therefore Apple and Android out-innovated them and sent them out the smart phone world. When they eventually learnt their lesson with the introduction of their BlackBerry 10, it was already too late.
Innovation is a key factor in today’s business world. No business can thrive without it. So the question to you is, how seriously do you take innovation? Innovation is the application of better solutions that meet new requirements, unidentified or existing market needs. This is accomplished through more-effective products, processes, services, technologies, or business models. Innovation is about meeting unmet needs, filling gaps and catching up with human desire. To get it right you will have to learn to think ahead of the competition. Imagine what your service will be like if you can control every situation. Ideas like this sets your mind in motion to finding new ways, processes and models of service delivery. Don’t be fooled by the realities of today, much more is still possible. It is the responsibility of the business leader to find it. If there is a time when ideas ruled the world, it is today. The business leader that will dictate the pace must therefore have a fierce commitment to research.
Consider Alphabet, a world leader in innovation. The company identifies and accesses breakthrough research through its active partnership with the scientific community. It funds over 250 academic research projects a year, publishes results on public databases such as arXiv, as well as on its own research site and invites about 30 top scholars who spend sabbaticals at Google every year.
Often, top researchers come to stay. Google offers scientists such a unique research environment, with unparalleled data sets, some of the best computing architecture in the world and the opportunity to continue to publish openly, that the company commands the attention of top-notch scholars. That’s commitment to research through collective innovation. Imagine the best brains in your field working with you directly to discover new possibilities in your industry! That’s how to out-pace the competition.
While you may not have the resources to bring in the best professors and equip them to co-innovate with you through research, you can create an environment that promotes playing with ideas. Staff can be encouraged to contact the CEO directly with whatever ideas they have and be rewarded for doing that. You can month innovation boards where your staff can write down their ideas as soon as it hits them. And most of all the CEO should be the Chief Innovation Officer and get directly involved in finding new ways of delivering the company services.
The bottom line is have a culture of innovation if you want to remain relevant. Make innovation your competitive edge just like Amazon.
Brian Reuben, the Lead Consultant of D•Seven Associates is a Business Advisor, Keynote Speaker and Author. @brianoreuben.