Innovation: New ways to provide value to customers

The challenge of defining innovation is a problem that often comes up and that I like to revisit from time to time since, how could I support my clients effectively if we have different ideas about what innovation is?

I try to answer this question by sharing a common vision of what innovation is and what it is not before starting to work on it, this way my clients and collaborators and I can move in the same direction and use the same parameters to work.

Some “classic” definitions (the most used, the most referenced) of the term “Innovation” could be the following:

Innovation is the “Systematic use, as an opportunity, of changes in society, the economy, demographics and technology.” (Peter F. Drucker, 1985)

Innovation is a “New, or significantly improved, product (good or service), process, marketing method, or organizational method, in the company’s internal practices, workplace organization, or external relations.” (Oslo Manual, reference publication on Innovation of the OECD and the European Union, 2005)

Innovation is the “Activity whose result is the obtaining of new products or processes, or substantially significant improvements to existing ones.” (UNE 166000 Standard, “Terminology and definitions of R&D&I activities”)

Innovation is “New ways of offering value to the customer” (O’Hare, 1988)

Innovation is “creation or modification of a product, and its introduction into a market.” (Real academy of the Spanish language)

If we look at these definitions of innovation, we can see that they all have the following parameters in common:

The sense of newness. An innovation implies some new way of doing things, there is a sense of something new in the concept.

The process vision. It is not a moment of inspiration, a brilliant idea, but a systematic approach to identifying and implementing ideas.

Orientation towards marketing. If the market does not buy, we are not innovating. There has to be someone willing to “pay” for this new way of doing things.

The simplest definition that we have seen that fits with the practical and results-oriented approach is: Innovation is New Ways of Systematically Delivering Value to the Customer. This definition brings together the sense of novelty (new forms), the process vision (systematically offering) and the marketing orientation (customer value).

Some more nuances, to be oriented:

About what innovation IS:

  • “New” doesn’t mean no one has done it before. If it has not been done before in this context, then it is considered new.
  • It must have the clear purpose of solving a problem, satisfying a need or satisfying a desire.
  • Innovation is in doing, not just in thinking or conceptualization. Simply having the idea does not constitute an innovation.

About what innovation is NOT:

  • Small adjustments and improvements to an existing process are not the same as innovation.
  • Invention, which becomes innovation when it is successfully brought to the market.
  • Technology. Not all innovation involves technology, either as a facilitator or as a result. The use of new technology does not necessarily mean that innovation has occurred.
  • Creativity: Creativity is having a great idea. Innovation is about EXECUTING the idea.

Call for innovation and sustainability projects in tourism companies

On 4/10/24, the call for the granting of aid to finance innovative/projects through cooperation was published in the BOIB with the aim of searching, implementing and digitizing sustainable innovative solutions in tourist establishments in the Balearic Islands. within the framework of the Recovery, Transformation and Resilience Plan financed by the European Union Next Generation EU.

It is the first time that a call for specific innovation appears for the tourism sector in the Balearic Islands, and given the competitive specialization of the islands, it is something that makes a lot of sense and seems to me to be a success.

The call consists of two programs: one for research and the other for innovation. The research program’s beneficiaries are any entity or legal person that carries out development and innovation activities, and the innovation program’s beneficiaries are companies and people registered in any of the island registries of companies, activities and tourist establishments.

I find the program interesting for several reasons: for the clarity of its purpose (search, implement and digitize innovative sustainable solutions in tourist establishments in the Balearic Islands), for the profile of projects it aims to finance (circular economy, energy cycle and water, agri-food cycle, digital transformation), due to the simplicity of the application process and the fact that money is allocated to projects in advance.

Hopefully the program will serve the necessary transition of the tourism sector and so that the Balearic Islands continue to be an international benchmark for tourism management; Contact me if you need help defining or structuring a project, whether you are a registered company or an R&D company.

Thinking about an organization’s strategy starting from its purpose.

In recent years, I have participated in defining the strategy of various organizations: an audiovisual cluster, a chemical cluster, a research institute, a public company, different businesses… and recently also an engineering college.

I was thinking about what I could share regarding the definition of the strategy of organizations that do not depend on a single person, the owner, the executive, or the entrepreneur, but rather on a collective.

One of the elements to consider in defining the strategy of these types of organizations is the importance of the narrative: in my view, building a strategy shared by the collective involves carefully listening to the different elements of the collective and putting words to the organization’s song, crafting a story about what the organization is and what it aspires to be, and what its role is towards the collective and society as a whole.

In this same line, once we have the organization’s narrative, its song, it is fundamental to identify its purpose, which is the reason why it must continue operating in its environment, what society and the planet would lose if the organization disappears. The purpose, to me, is more about the organization’s life meaning, it is the organization itself that defines it, and it is not the same as the organization’s mission, which is the meaning given to the organization by the elements that constitute it. In the end, it’s about observing what life gives you to offer what life asks of you, and the purpose would have to do with what life asks of you.

The traditional structure of strategic planning includes an internal analysis (who we are, what we want, with whom we can have it, and how) and an external analysis (political, economic, social, technological, ecological, and legal factors that affect or can affect the organization’s activity, among others). These internal and external analyses are usually summarized in a SWOT diagram (Strengths, Weaknesses, Opportunities, Threats) of the organization, and from there the mission, vision, and objectives of the organization for the next period, usually about 3-4 years, are defined.

In a highly changing environment like the one in which organizations usually operate, one might think that it makes less and less sense to define and specify what the organization will do in the next 3-4 years, since in most sectors the level of change is too high to maintain the same organizational trajectory for so long. In my experience, it makes a lot of sense to do the internal and external analysis and detailed definition of the purpose, mission, vision, objectives, and other elements at least once every 10-12 years because this contributes to creating a narrative about who the organization is and what it wants to do, as a general approach, and to reach consensus among the different agents on this approach.

However, once this is done, it can be observed that the purpose of the organization is practically the only thing that does not change. That is why, as part of the strategy and thinking about shorter-term planning, I like to represent the organization’s business model canvas, how it is now, and the business model canvas of how it can evolve in the next period, to pull it in that direction. With this tool, one can organize and imagine where the organization can evolve and establish objectives and key expected results that lead the organization to be what it is called to be.

Doing an annual review of the canvas and a proposal of what should change constitutes a short-term strategic planning model that I believe allows organizations to adapt much better to the intrinsic instability of the times we live in. The simplicity of the model makes it much easier to convey what is important for the next period to all involved, allowing them to align much better with the organization and pull together in unison in the same direction.

An online course on innovation management

The first project that arrived in this new stage is a request from MIA University, an online university based in Barcelona, and there are a total of 12 30-minute videos on innovation management.

It may seem like a lot of time, a lot of content, something difficult to design and execute. It had been a long time since I organized my knowledge and experience in innovation management to tell it to someone else, so I decided to broaden the focus and not only talk about the innovation management process, but also include other topics such as innovation culture, organization of collaboration, the scaling of innovations implemented in lean mode, reflections on ethics and sustainability of innovation and the identification of innovation trends of interest to organizations.

The result is a fairly complete course that starts from the following description:
Innovation is the lifeblood of successful organizations in today’s rapidly evolving business landscape. This comprehensive Innovation Management course equips students with the knowledge, skills and strategies necessary to drive innovation within their organizations.

The objectives of the course are:
● Understand the fundamentals of innovation
● Develop innovation strategy and planning.
● Manage the innovation process
● Perform Innovation Knowledge Management
● Implement innovation metrics and performance measurement.
● Create a culture favorable to innovation
● Understand open innovation and collaboration
● Think about the implementation and scaling up of innovation
● Carry out ethical and sustainable innovation
● Know future trends in innovation

Managing innovation goes far beyond the diagnosis process, innovation plan, project management, knowledge management. It talks much more about people and attitudes than about tools and technology (although it also talks about tools and technology!). And he increasingly talks and will talk more about reflection, ethics, sustainability and foresight, which is the ability to look to the future and identify impact innovations to build the world we would like it to be.

Innovation Management Process

Many people think that innovating only has to do with inspiration, creativity and good ideas. But Innovation has a lot more to do with hard work, systematization, and ability to implement the good ideas that anyone can have.

With this in mind, we can define and implement in almost any organization an innovation management process, that identifies subprocesses that involve all the organization staff.

The first subprocess of innovation mamagement process is Current situation analysis, this is, try to think about the organization innovation level within its sector (this would be the “innovation degree”) and its attitude towards innovation (this would be the “innovation capacity”).

Once this thinking process has started, it is time to identify and priorityze the innovation projects that will improve the company situation in innovation degree and capacity.

The third step in this process is to find ways for project financing, and this ways can go through public funds, risk capital, banks, private capital and so on. Every way is worth a look.

Next, comes project execution, and you can read my october article “Innovation project management” for further information. This is about clearly defining, executing and closing projects implementation.

The project implementation can lead to some results that you might want to protect through intellectual property rights in order to guarantee the income of your investigation. How do you protect each type of result is what you have to think next.

Finally, we have the last step of letting others know how we play in our organization, this is, Innovation Difusion subprocess. The fact is that our stakeholders want to hear that the organization fights for a better society, and as Rosenberg says the results for society have now to do with force, capital and techology.

All these subprocesses make no sense if they do not come supported by a clear, simple and effective knowledge management process, that will let you know the current situation of your organization, what projects make more sense in this current situation, how can you finance them, who can execute them, how can you protect them and what story do you have to tell about them.

The Innovation Management process is not that complicated, is it?

Innovation project Management

As far as I have experienced, Innovation cannot be successful without being structured as a Project. Companies can develop their day-to-day activities in a fuctional way, this is, each department just doing their job and a manager that integrates the activity of all these departments.

But innovation projects (which are, as I already commented in some other article, the ones that are going to guarantee the market position of the company in a long-term basis)must be structured as projects.

A project can be defined as a group of activities developed in a concrete period of time using several resources and oriented to get determined objectives and results.

There is a lot of Project Management bibliography, but when we talk about small projects there are three phases one has to consider:

DEFINITION AND PLANNING PHASE, oriented to clearly define the objectives of the project and the results expected (which are not usually the same: a project can be “develop a new service”, and results expected could be “enter a new market segment” or “increase sales”), the deliverables that will generate the project, the management structure, the project team and the project planning, once a business case has proved that the project makes sense for our organization.

PROJECT CONTROL AND FOLLOW-UP PHASE, mainly including activities like risk and problem management, change management, documentation management and (last but no least) financing and economical management.

CLOSING PHASE, basically oriented to analyse the project profitability, to prepare knowledge transfer and to evaluate the performance of people in the project.

Common sense is key for project success (just like for any other business activity), but it is amazing the amount of innovation projects launched by companies without a business plan to support them. Let’s start by planning and a lot of money and emotional pain will be avoided!

Seasonality analysis in Minorca (Balearic Islands)

Back from a long vacation period now it’s time to update last InnoBalears information, and this includes gaining the Ateneu de Maó price on tourism research last july. The price will be lended by September, but maybe here we can make a few comments on the research analysis performed and its main conclusions.

Minorca is a flat island in the Mediterranean Sea that forms part of the Balearic Islands, known in Europe by its sun&beach offer for tourists. This island has some particularities that have conditioned its touristic evolution comparing to the other more popular balearic islands: Majorca and Ibiza, but suffers the effects of seasonality in the same way as the other islands.

The study was about seasonality in Minorca island, and the most important conclusions of the study were:
– Certanly there is seasonality in Minorca Island, concentrated in the 6 months between April and October
-The tourism coming from Spain is definitely important in the low season, as most tourists come in this season from Spain
-The seasonality has had a low but continuous depression since year 2000
– In the last 10 years the category of Minorca hotels has improved from low to medium and high category, so the island is ready to host the profile of people that travel in the low season
– One of the reasons of the seasonality is the lack of transport by air or sea with the island
– The alternatives about seasonality in Minorca are three: the creation of new working models, to let the deseasonalization process that has started roll-out or to promote the deseasonalization.
– The promotion of deseasonalization is the most recommended initiative, through the development of a deseasonalization plan that includes all social agents in Minorca.
– The deseasonalization plan might include the participation on a international event at least once every ten years, the promotion of winter products in the target markets and the development of new touristic models designed for the island.

It is time now to promote research and innovation on tourism, and contests like this one are a good starting point.

Topic of the week: The Innovation Process

Lately I’ve had some meetings where a well-situated bussiness man asked me what is really Innovation and how could we talk about Innovation in a tangible way. Innovation is a process. Innovation is an attitude.

To make it tangible, let’s talk about the process. The Innovation process starts with a diagnosis of current situation, any bussiness manager can do this (and does it systematically) on his or her business, this is, staying aware on what happens around my company, how do my competitors move, what techology can make my bussiness easier. To systematyze this process one can subscribe to a good periodical review on the sector, assist to determined events, listen to any provider that comes up with new ideas, support consultants pressure to buy the new bussiness aplication (and buy it if it is really worthy), etc.

Next step is to develop once a year (at least), and according with the analysis performed, a list of innovation projects that could make sense for my company, and characterize them in a developed-enough way so that one can have an idea of how much (more or less) should they cost and how worthy they are for the bussiness. With these criteria on mind one can prioritize the list developed.

The third step includes projects financing, this is, getting the resources that will guarantee projects implementation in the right way. There are several institutions that lend money to develop projects and determined governments give financing facilities, but never lose of mind that the most important risk and the work is for the bussiness manager. This point, financing, might change the initial priorityzation made in our list of projects, as depending on public policies one may be able to finance project number 3 in our list…

Until this point we haven’t actually started to work on the project, we just have thought of it! Now it is when Project Management process starts with its steps of Design, Implementation, and Testing and all the substeps that the concrete project needs, until it is completely implemented and working on the actual environment.

But the Innovation Management process includes two more steps, which are as important as the ones already presented and which are normally ignored by many companies, that do not take the benefits of them. The questions one answers with these two steps are:
1) How do I protect the results of the project? Maybe you don’t want or you can’t protect them in the traditional patent way, but with a confidentiality contract or simply keeping the secret you are already defining the Innovation Project Protection Policy for your company. There are many ways of maintaing the competitive advantage derived of the project, you just have to find which one is good for you.
2) How do I let my customers know that I am working for them and contributing to the development of knowledge in the world with the development of these projects? This is the last step of the innovation process: difusion. Maybe the innovation process developed doesn’t have a direct impact on customers, but sure they are willing to know that every day you work to improve what you do.

I think that if you look at Innovation as a process you can think of tangible results: if you can’t think of them you might not have innovating attitude, which is the basis to survive as a company in this world of today. We will see how to get innovating attitude some other time.

Topic of the week: Spanish bibliography on Innovation and Tourism

As most people know, Spain has traditionally been the third touristic destination in the world (it was the second last year) after USA and France, which theoretically implies certain industry knowledge ready to be exported in our knowledge society, contributing to the Europe of Knowledge development.

Why is this not (very) true? There are several reasons why Spain is not exporting its knowledge on tourism as other countries in Europe are doing with their knowledge in industrial sectors, i. e.:

  • Knowledge in tourism is not patentable as it is in industrial sectors, you can’t protect neither license effectively most of the innovations that might enter the sector
  • New products in tourism are very easily copied by competitors, unless they are supported by a new technology industrially protected (that belongs to the company that has launched the new product, quite a big barrier)
  • It is quite difficult to get information from R+D processes in Tourism, as R+D is not systematized as it is in industrial sectors

Lately (since year 2000) there have been in Spain several initiatives that defend the exportation of knowledge on what we really do best, this is, tourism. In this line of knowledge, COTEC Foundation has published the first Innovation studies at Spanish level, http://www.cotec.es/publica/estudios.html

Also COTEC has published a document on new technologies in tourism, http://www.cotec.es/publica/documentos.html

The Universitat de les Illes Balears has in his portal a document called “Innovación, Transferencia de tecnología y desarrollo en empresas hoteleras. Estudio de las contribuciones de las empresas hoteleras de origen balear a las economías latinoamericanas”, http://www.uib.es/catedra_iberoamericana/publicaciones/empresas_hoteleras/, that highlights the importance of the previous experience of Balearic entrepreneurs when they got to Latinamerica to develop their 365 days/year Sun and Beach hotel businesses.

The Universitat Oberta de Catalunya also has published a document, http://www.uoc.edu/dt/20219/index.html, that introduces an idea that for me is key to future tourism development: the idea that people are going to be willing to pay more for emotions than for technology, and this has to be considered when designing any innovation process in any type of bussiness related to tourism in the future.

As we can see in these examples, in these 5 past years Spain is starting to move on the way of knowledge exportation as a plus to the tourism business creation at national level, even though no licenses for this knowledge are going to be paid. Northern Europe might be Europe of knowledge at industrial level, Southern Europe might be “of non-licensed tourism knowledge”. Let’s go for it.

Topic of the week: OECD Conference on Innovation and Tourism

On September 18-19, 2003 took place in Lugano, Switzerland, the most interesting conference on Innovation and Tourism I found out till now.

I found it through Nathan Rosenberg, one of these American gurus on innovation research that has these details that I love, like answering someone they’ve never heard about that asks for innovation policies on tourism.

Though the content includes more or less expectable conclusions, next papers were specially interesting for me:

  • Explanation of the link between innovation and economic growth, by Rosenberg, also in touristic sectors
  • Point of view by Xavier Décelle (Paris), where he outlines specific features and focus on innovation in tourism
  • Quite interesting explanation of the link between innovation and product improvement by Weiermair (Innsbruck)
  • Presentation of several cases of innovation policy definition or application in Australia, France, Korea and Malta

You can find more information and the conference papers if you type “OECD innovation tourism lugano” on Google. I think any stakeholder on tourism can find a lot of interesting information on these papers.