Modern web technologies have enabled organisations in the Wholesale & Distribution (W&D) industry to innovate more frequently and at a much faster rate than ever before - both in terms of the products and services they offer, and the ways in which they serve their customers. Sophisticated web services and APIs, service-oriented architectures, and web content management platforms - among other solutions - all present valuable opportunities for innovation, while also allowing W&D organisations to do more for less through the repurposing of content and data, and the automation of core operational processes.
Typically though, it’s not a lack of access to appropriate technology that’s holding these organisations back from realising the full benefits of innovation, but rather traditional ideas of budget, company culture, and time and resource allocation, which are often at odds with the new initiatives being pursued. To take just one example, we need only look at the concept of digital transformation, which has truly come of age in the last 24 months and is now on the agenda of small and large organisations alike, across all kinds of industries. Having seen various digital transformation plans in varying different stages, it’s clear that the term means many things to many people - making it crucial that the entire organisation is first enabled and encouraged to create a single unified vision and strategy for said transformation through the adoption of a digital-first mindset.
Challenging the status quo in this way, however, is still seen as a risky process. By their very nature, innovation projects cannot easily be tied to clear Return on Investment (ROI) projections, and organisations (perhaps understandably) may be reluctant to jeopardise existing business or plough valuable investment into unproven ideas and concepts. Statistically speaking, too, in both start-ups and more established organisations the majority of innovation projects end in failure, introducing further barriers to achieving consensus around investment in this area.
At the same time though, concerns around competition and disruption provide a powerful motivator to seek out innovation, and these concerns are only growing as W&D organisations observe the turmoil being wrought by digital in other industries such as finance, where traditional financial service providers are facing reduced customer loyalty, market share and transactions as a result of the fintech revolution.
Lean Startup and Agile
With so much pressure to succeed yet so much at risk, then, it may seem impossible for organisations to know what best to do. But what if there was a way of introducing innovation into your online offering while keeping validation costs down - reducing risk and enabling lessons to be learned at an early stage? A no-brainer, surely.
This is exactly what’s promised by the Lean Startup methodology, of which I’m a huge fan. Suitable for long-established organisations looking to innovate, as well as new business initiatives and smaller teams, the approach embraces the fact that most ideas will not succeed; adopting a philosophy of ‘fail fast, fail cheap, and learn continuously’. It also borrows principles associated with Agile frameworks, with ideas such as value, iterative refinement and minimum viable products commonplace.
At Box UK we’ve embraced both Lean Startup and Agile ways of working to great effect - using these approaches to help our clients start to bring their innovative ideas to life. If you’re interested in doing the same then read on, as I take you through process by which we move from whiteboard to real-world...
Information and insight
As having access to customer input, insight and feedback is one of the single biggest success factors in innovation projects, we usually begin the process by getting clients to refine their ideas with reference to their actual users. During this phase we’ll typically ask questions such as:
- Can you reference any existing user/customer personas to identify intrinsic needs, motivations and usage contexts that will need to be addressed, or any engagement/buying profiles that can help you ensure high levels of interactions and sales?
- When was the last time you carried out ‘voice of the customer’ research? This helps provide a clear understanding of exactly how your customers view your offering - what they value, what they hate, what they wish you did more of or did better…
- What don’t you know about your customers? While achieving insight in this area is obviously a challenge, it may be that you start by assessing whether you currently have all of your customers’ business, and how they gain the required information, products and services they are unable (or don’t want to) buy from you instead.
- What does your data tell you about your users, and the ways in which they interact with you? We often use tools such as Google Analytics and Hotjar to build up a detailed picture of customer behaviour; identifying trends and patterns with regards drop-off points, bounce rates and more, which can prove valuable in contributing to the formation of an early hypothesis.
It’s also vitally important to understand how market forces may affect any innovation efforts, and as such we work with clients to uncover and address issues in this area too. For example, who are the industry movers and shakers? The upstarts? The dinosaurs? Where is disruption likely to come from? It’s important to look not just at competitors either, but also progressive organisations from across a wide range of industries. Conducting a review of peers, innovators and competitors is a great way to get this overarching insight; providing as it does a picture of the wider digital landscape as well as ideas from leading innovators that can be used to drive growth/improvements/efficiencies in what may be a completely different environment.
By thinking about how all these different considerations apply to your organisation you should be able to come up with a multitude of different ideas that can then be workshopped to gain agreement on which (if any) you want to take forward into production. Before launching into a full-scale project however, with all its attendant investment and uncertainty, in line with the Lean Startup methodology you’ll want to test and validate your hypothesis first.
To keep things fast, low-cost and low-risk, testing can often be done on paper or using similar lightweight prototypes. You may even want to take it out of the office, in an approach termed Customer Development by the Lean Startup movement. Go out and talk to your suppliers, customers and potential customers to find out what they really think - not only will this give you direct insight into the potential benefits and challenges associated with your solution, but often it can be done with little or no design or development overhead.
Using the outputs of this stage to give greater form to your concept, the next step is to create a more tangible deliverable. We often produce these kind of outputs for clients, working at various levels of detail from sketches and interactive wireframes through to technical prototypes. Even at this stage, though, the focus is on remaining evolutionary and lightweight, so we use open source software and third-party services where appropriate to reduce both development time and cost. There are many ways to see if these prototypes will fly in the real-world (which is where user experience activities such as guerrilla, remote and lab-based usability testing come into their own), but no matter what techniques you use the focus should be on avoiding unnecessarily long product development cycles.
Instead, we recommend starting at the lowest possible point at which a hypothesis can be tested either with customers or technically, then using an Agile framework to refine this iteratively and incrementally, helping eliminate wasted time, effort and investment. This approach de-risks the entire process of innovation, meaning the projects are more readily bought into, and decisions can be made based on evidence and fact rather than projection and forecast - ultimately helping you launch a product or service that customers actually want! And while you still might not be able to determine ROI from day one it will enable you to share tangible results at an earlier stage, further helping prove the concept and maximise the value being delivered back to your organisation.
A cultural shift
No matter what size your organisation, creating a culture of innovation, entrepreneurship and digital-first is the key to a successful future. And - no matter what size your organisation - taking a Lean Startup/Agile approach can help you achieve this, while mitigating associated risk and cost too. All of which makes it an undeniable attractive proposition.