Entrepreneurial Goldmine

Disruptive technologies have been driving innovation for hundreds of years, but there has never been a better opportunity to bring efficiency to an inefficient process, function or industry.  The Flat World (best described by my colleague George Benckenstein) continues to provide unparalleled opportunities to enable boot-strapped innovation with the best capital…paying customers!  Just as the railroad companies didn’t realize they were in the transportation business and missed the industry evolution of the airlines, the money transfer companies (Western Union) and the credit card processing industry missed the consumer-to-consumer opportunity that enabled the likes of PayPal.   

With all the lessons learned of the past, PayPal should have been a new product in an existing industry from an industry leader, but it wasn’t.  PayPal was the result of great entrepreneurial minds that indentified an opportunity to dramatically improve a business process with industry disrupting technology.  So what’s the opportunity for you?

Opportunity Identification

Business process improvement opportunities are everywhere, just look around you.  The best places to look for process improvement opportunities is where there are multiple human touch points.  For example, I recently spoke with a business-to-business company that has created a $30mm revenue business by reducing the human touch points in the core process from 15-20 hands down to 3-4.  This process improvement allows them to sell at the competition’s cost and still earn 60% margins.   As a business owner or employee of a major corporation, you’ve probably seen opportunities to save the company money or to increase ROI, but for some reason, that opportunity isn’t #1 on the company’s to-do list…there’s a different primary priority that soaks up the organization’s energy and that great process improvement opportunity never gets implemented.  

If you’ve seen this situation before, your organization is probably not the only company suffering with the observed inefficiency and the inability to execute.  And that’s where the potential opportunity may exist.  Because you are intimately aware and involved in the problem, you have a great vantage point to configure a solution.  But  solving the problem is only half of the work required.  You need to confirm that the problem isn’t unique, determine the volume of companies with the problem, quantify the upside (cost savings or revenue/profit increase), and simplify a way to monetize the solution.

Top 5 Innovation Characteristics

So now that you know to look around you for those business process improvements, you need to understand the characteristics of the best innovators so you can increase your probability for success.  If you want to innovate, you need to possess the required skills, partner with innovative people or have innovative employees.  In the December 2009 issue of Harvard Business Review, three authors collaborate on “The Innovator’s DNA” to showcase the five discovery skills that separate the true innovators from the rest of us, and here is what they found:

• Discovery Skill #1: Associating – The ability to successfully connect seemingly unrelated questions, problems or ideas from different fields, is central to the innovator’s DNA.

• Discovery Skill #2: Questioning – The best of the best always find a way to maintain a 3:1 question to statement ratio and most often ask “Why?”, “Why Not?” and “What If?”.

• Discovery Skill #3: Observing – Discovery-driven executives are like anthropologists, producing uncommon business ideas by always observing customer behavior.

• Discovery Skill #4: Experimenting – Like scientists, innovative entrepreneurs actively try out new ideas by creating prototypes and launching pilots. 

• Discovery Skill #5: Networking – Unlike most execs that network to sell or promote, innovative entrepreneurs network to learn.  They make a conscious effort to extend their knowledge domains.

Execution Risk

Once you have your team in place, then you need to execute.   One of the key components to executing a business process improvement opportunity is to follow a proven methodology.  The industry is widespread with approaches, models and best practices, so do your research and get to work.

Business Process Management is a powerful approach for organizations to improve performance and to improve customer satisfaction. In spite of the wide acceptance of the benefits of process awareness, the improvement of Business Processes is still more art than science. As a result, the ability to create prototypes and launch pilots is critical to the innovator’s ability to successfully execute.

Business Process Improvement Ideas

1. Direct Mail - I recently read of a new concept in Ad Age about digital mailboxes where direct mail will be pushed instead of snail mail.

2. Coupons - Most retailers and manufacturers are trying to figure this space out.

3. Medical Billing - Systematically automating the billing, collection and reconcillation of the health care system is a great opportunity.

4. Automobile Diagnostics - Using the technology in automobiles to help consumers assess the health of their car could be priceless.

5. Business-to-Business - Leveraging the mobile phone to extend small business owners’ office provides continuous connectivity.

Keep looking around you, keep asking WHY and don’t be afraid to take the leap.  Good luck & stay tuned!

-hb