By: Chuck Frey
Emulation is a viable technique for driving innovation. However, one has to look outside of their current industry for it to have any real value, often very far away from that industry.
One of the toughest challenges for any innovation initiative is finding a place to start. Lao Tzu famously observed more than 2,500 years ago that the journey of a thousand miles begins with the all-important single first step. But if you really don’t know where you’re headed, how do you know in what direction to take that initial step?
Innovation is never a single moment of enlightenment but an iterative process of hypothesis and refinement that ultimate results in a breakthrough. I was speaking recently with a colleague who was trying to help a news media client “rethink” their business. But this executive was adamant that they look to current “best practices” and “industry leaders” – within the news industry — for ideas and inspiration.
In much the same way that businesses cannot slash costs to achieve industry leadership, copycatting other (in many cases equally challenged) peer companies won’t lead to breakthrough innovation either. Emulation is a viable technique. However, for it to serve as a useful process for defining a starting place for sustainable innovation one has to look outside of their current industry – and often very far away from that industry.
I suggested to this colleague that he might want to look at a completely unrelated industry and its structure for some ideas to emulate – and pointed him towards the deregulated U.S. electric power industry as a great place to start. At first he was incredulous, and professed that he saw absolutely nothing in common between a news media company and an electric power player. But then I could see the spark of enlightenment take hold in his eyes and his attitude changed markedly.
He saw that news, much like electric power, has three very distinctive businesses in its industry value chain – generation, distribution and customer interface. Where most news organizations are missing the boat, I pointed out, is that they undervalue their generation capabilities and instead focus on the much lower added value distribution and customer interface components. The real value of a news organization isn’t its distribution, printed output or website – but the depth and quality of its reporting. That’s what truly distinguishes one news organization from another. The other pieces are essentially commoditized today. And yet it’s in these commodity segments that most news organizations spend most of their time trying to gain competitive advantage – and failing in the process.
Of course there are salient differences – for one, the electric power industry still has regulated elements in its value chain, while news media don’t – except perhaps in broadcast media. The point here is not to blindly copy another industry, but to extract key business insights as a starting point and then refine these concepts as required to align with the unique aspects of the industry you are trying to innovate within.
What do you think? Where have you seen unique aspects of one industry you think would be transferable to another seemingly dissimilar industry?