Seven sources for innovation

Growth requires a solid grasp of what is changing in the markets in which you operate.  This understanding will lead you towards new business opportunities. Peter Drucker suggested looking in the following areas to spot new options for your business:

  1. Unexpected successes and failures.  You may be targeting a market segment but have found sales from an unexpected source.  A failure may be used as a clue as to how consumers’ values and behaviour has shifted.  IBM targeted its first computer at banks but sold the first to a library.
  2. Incongruities.  Are you achieving growth but seeing your margins fall?  What do you know about problems in your production or distribution processes?
  3. Process needs.  Is there a missing link between what your organisation offers and what customers or consumers really want?  What are the well known customer or consumer problems that need solutions?
  4. Changes in industry and market structures.  Who are the new buyers?  Who else has influence and is it increasing?  Who has the cash?
  5. Changes in demographics. What opportunities present themselves with ageing populations? If people remain at work longer what does this suggest for your business?
  6. Changes in meaning and perception.  Information overload caused by the internet is a source of opportunity for some businesses.  How can you take a glass half empty and turn it into a glass half full?
  7. New knowledge.  What new technologies, ideas or processes are available for your business to exploit?

The search for new products and services, markets, processes and distribution channels will be easier by looking at each of the seven sources carefully.  Thinking through each source creates a mindset for innovation.

Reference: Drucker, P., Maciariello, J. A., (2008), Management, revised edition, Collins

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