4 Ways to Shape Innovation in the Collaborative Economy
Every new approach to business comes with its own unique set of challenges, and the collaborative marketplace is no different — especially when it comes to identifying effective ways to pursue innovation. From developing ideas to constructing a successful innovation pipeline, the principles of a true-blue sharing economy bring up some important questions for business leaders and decision-makers.
To help you get thinking in the right direction, here are 4 ways to shape innovation in the collaborative economy.
1. Let Go of Traditional Values (When it Makes Sense)
The concept of dynamic business tactics is frankly lost on a lot of people, especially when what’s previously worked did so for a very long time. But it’s no secret that the changing technological landscape is having profound effects on the way companies are run, and in turn, an impact on strategy (innovation especially). The greatest threat of the sharing economy to innovation and profitability is the very real possibility that sales will dramatically decline as consumers share products and services with each other at a base level. Ask yourself what traditional practices you can let go of to lessen the damage, and work on phasing them out.
2. Innovation, Not Inflation
This shift of power from corporate to consumer scaring the hell out of a lot of businesses because it’s shaving the top off of expected revenue (see above). The knee-jerk reaction is to raise the market costs of products and services to close the gap between dropping consumption levels and ROI. But guess what — hiked-up prices scare off even the most loyal of customers. And while it’s easier said than done, a company’s saving grace in the sharing economy will be driving innovation, plus one of two things: leveled or reduced costs that splinter even further for additional users (think subscription services); or, products that actually lose their edge when distributed across several, non-paying users. The former is not the most positive reaction, but this is akin to reducing service accessibility, much like Netflix has done with multi-device accounts.
3. Test-Drive the Cooperative Economy First
The collaborative economy is not as much of a tidal wave as it sometimes seems — it’s a concept born out of something else that’s existed at least since the dawn of industrialization (though many argue that it’s much, much older): the cooperative economic model. A cooperative economy is system in which people subscribe to a pretty strict set of principles in order to meet “basic needs in personally, socially, and environmentally responsible ways.” The biggest issue? It flies aggressively in the face of corporate tendencies to push for bigger, better, more, faster, etc., because it’s dependent on a reduction of superfluity. But: if we think of it terms of quality over quantity — for example, cultivating loyal customers, rather than more customers, or more innovative products instead of products that do more stuff — it’s got potential as a bridge between hierarchal consumerism and the future of sharing. This kind of approach is tailor-made for an innovation management program, which allows even huge companies to innovate at scale and surface great ideas from their entire pool of employees.
4. Actively Listen to Your Market — Inside and Out
I say “actively” listen because every company ever claims that it not only listens to its market, but meets a need that is not otherwise met by someone else. But actively listening creates change quickly, involves an exceptionally high level of user-seller engagement, and probably seems both costly and inefficient, particularly for companies with thousands of customers. The second part (“inside and out”) requires turning an open eye towards the ideators and intrapreneurs within your company. An organization’s first line of access to product and service innovation, not to mention user feedback, is their personnel. It’s critical to maintain open lines of communication across the company, where you’re likely to get the most informed feedback. Plus, you don’t have to wade through piles of data to figure out if something isn’t working, or to start shaping an awesome new idea — it’s right there, and yours for the taking.