Innovation: Getting Big Wins from Small Ideas
When it comes to innovation, people often think of ground-breaking innovation like Post-It Notes and laser surgery. But most companies would welcome a series of small innovations that deliver measurable impact on operations or business performance over time.
Case in point: To help keep excitement and demand high for Beanie Babies in the 1990s, Ty Inc. founder Ty Warner limited production for each line of stuffed animals and retired a few each year. Creating a shortage of the toys fostered a buying frenzy among collectors.
Innovation can come in different forms, such as a process that streamlines workflows or an incentive program that fosters employee engagement. For established companies that are striving to be on the right side of enterprise disruption – to respond to the changing needs of customers ahead of startups – the use of data analytics can be a valuable asset.
Indeed, organizational leaders who are looking to improve specific areas of performance (e.g. customer satisfaction, employee productivity) can use predictive analytics and data discovery tools to explore how even minor modifications to a program, a process, or an activity can potentially elicit significant performance improvements.
For instance, the CFO for an industrial manufacturer sees that gross margins for the company shrank a few percentage points for its latest fiscal period. A closer look at the numbers reveals that raw materials costs have remained flat and that productivity had increased during the period, which on its own should have lowered costs.
Analysis of the company’s other assets, including its employee work teams, revealed that workers on its overnight shift had been clocking significant overtime hours. The increased workload for these employees could make them susceptible to being less productive and less attentive to quality.
By adding more workers to the overnight shift, the CFO increases costs but this is more than offset by productivity improvements which helps to lift the company’s gross margins.
Meanwhile, customers share streams of information about process and product improvements through online surveys, contact center interactions, and social media posts that can be analyzed and acted on. For instance, customers for an online retailer complain about the difficulty and expense associated with returning products.
Decision-makers who draw on these insights and analyze existing processes and costs are able to determine that a no-questions-asked free shipping returns policy would result in greater customer satisfaction and higher sales volumes which would more than offset the increased shipping costs that result.
This article was written by the Spotfire Blogging Team and published by TIBCO Spotfire’s Trends and Outliers Blog.
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