As our nation's eyes are glued to screens watching footage of Team New Zealand and the America's Cup, it is hard not to be impressed by all the innovation on offer. The America's Cup boats have us marvelling at the speeds that can be reached and the ability to control such a large boat on such a small foil.
As you scratch a little deeper, beyond the sails and the foils, you end up with a word that is often glossed over in most articles about innovation; process. Team New Zealand appears to be benefiting from a sustained focus on process innovation, which I will pick up on below. Through trial and error, Team New Zealand has perfected many manoeuvres which are out of reach of the other teams (the foil tack being the most obvious). At the beginning of the America's Cup Campaign it would seem that nobody thought this was possible. With capable equipment (shared by all teams) and a focus on process innovation (the teamwork required to undertake a foil tack) Team New Zealand has found a competitive edge. Let’s hope this, alongside the other innovations on show, is enough to bring the cup back to New Zealand.
Process innovation is often overlooked by companies. Best practice, standardisation and simplification are words more frequently used in combination with the word ‘process.’ With the ever changing technology landscape there is plenty of under-explored territory where process innovation can be found. A quick look at a few very successful companies using process innovation as a competitive lever suggests that there are plenty of rewards for those that are willing to leave the relative safety of best practice processes.
The fashion retailer Zara is perhaps one of the most notable contemporary examples. By focusing on its processes, Zara has been able to develop a highly responsive business model. Where competing brands are still running their business around 'fashion seasons,' Zara can go from a concept design to having clothes in the stores within 3 weeks. By keeping inventory levels low and monitoring how the customers are responding they have developed a highly profitable business that is the envy of its competitors.
The mobile phone company GiffGaff is another example worthy of a mention. Customer support is one of those processes that is challenging at the best of times. When technical products are involved (think mobile phones, wi-fi connections, etc.) providing this service can also become very expensive. GiffGaff inverted the conventional thinking of how customer support is delivered. They have turned their customers into sales and support representatives through the use of social media, crowdsourcing and gamification. In the process they have created a new business model that has resulted in delivering better service to customers at a better price that their big-brand competition.
All of these examples provide a salient reminder that innovation is not just about the flashy things that customers, or in the case of Team New Zealand the public, can see. Sometimes the biggest gains can be made by having another look at the basics and rethinking how these can work in a new world with new technologies. Process is one of these areas where material gains can be made which can provide a distinct competitive advantage over others in your industry.
Grant Frear is a consulting partner at Deloitte.
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