Innovate Where You Differentiate

Although some innovation experts say that you want “everyone innovating everywhere,” I believe this is bad advice.

Instead, make sure that everyone is working on innovations that are of strategic importance. You don’t want employees innovating everything. You want them to innovate where you differentiate. That is, focus your energies on those capabilities that set you apart from the competition and make a difference to your customers.

One company that has done this exceptionally well is the financial services firm, USAA. They only offer services to members of the military and their families. Their mantra is to serve those who serve our country. Given the unpredictable and often transient nature of those in the military, being ‘easy to do business with’ is critical. Their differentiator is world-class customer service. They define innovation as “anything that makes the lives of their members better.”

This clarity helps them focus their innovation investments to produce unprecedented results.

In fact, year after year,  USAA gets top ratings for customer service. For example, a recent Temkin Customer Service Ratings puts them at the #1 and #2 positions in customer service of any company in any industry.

What about you?

• Where do you differentiate?
• On which list would you like to be #1?
• Does everyone in your organization have a clear understanding of this differentiator?
• Is this used to prioritize your innovation efforts?

When you “innovate where you differentiate,” you get everyone laser focused on what matters most to your organization. This gives you consistently higher ROI on your innovation efforts.

image credit: theakelley.com

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Stephen Shapiro is the author of five books including “Best Practices Are Stupid” and “Personality Poker” (both published by Penguin). He is also a popular innovation speaker and business advisor.