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Ensure a Positive Candidate Experience When Hiring Contingent Talent Remotely

As digitization, coupled with the global pandemic, propels contingent hiring online and with more individuals relying on employer reviewer sites to evaluate businesses, delivering a positive[...]

March 10, 2021

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How to Reap Big Rewards from Your Business Innovations, Not High Costs

Regardless of industry or the type of enterprises we lead, we’ve found ourselves standing at the threshold of a dynamic business evolution, where innovation is steadily rising as a new form of capital. The advances we’re witnessing in exponential technologies and digital transformations have ushered in an era full of exploration, curiosity and boundless possibilities. The challenge, however, is defining a nebulous concept like “innovation.” What does it really mean? There’s a difference between innovating and merely inventing. Without addressing a real need or solving a problem, an invention falls short of innovation. Even if you have a genuine innovation in your wheelhouse, the burning question inevitably becomes: how do you capitalize on it? This is the dilemma that haunts business leaders who wonder whether they’re developing the right solutions for customers and if those breakthroughs will generate revenue. For anyone who’s stumbled into that quagmire; there are answers. You can reap big rewards from your business innovations when you follow the money.

Where Good Ideas Go Astray

Last May, a thought-provoking business book hit the shelves. Written by Madhavan Ramanujam and Georg Tacke, Monetizing Innovation: How Smart Companies Design the Product around the Price tackles the pressing questions surrounding innovation in the 21st century economy.

Every two years, Simon-Kucher & Partners conducts the world’s largest pricing survey. During the firm’s latest analysis, researchers found that 72 percent of new products introduced over the last five years had failed. This realization prompted Madhavan Ramanujam, a partner and board member with the global consultancy, to author his book.

“The failure rate is so high, in part, because the factors leading to innovation are under pressure,” Ramanujam told The Marketing Journal in July 2016. “Traditional research and development is becoming more expensive and disruptive innovation is coming from smaller, nimbler companies. At the same time, the rate of innovation is accelerating around the globe, with Asian countries rapidly growing their share of global R&D spending. We wanted to analyze how these factors are attributing to new product failure, and come up with solutions to avoid these startling failure rates.”

Ramanujam and Tacke determined four factors that are responsible for failures.

  • Feature Shock: “Cramming too many features into one product -- sometimes even unwanted features -- creates a product that does not fully resonate with customers, and is often overpriced.”
  • Minivation: “An innovation that, despite being the right product for the right market, is priced too low to achieve its full revenue potential.”
  • Hidden Gem: “A blockbuster product that is never properly brought to market, generally because it falls outside of the core business.”
  • Undead: “An innovation that customers don’t want but has nevertheless been brought to market, either because it was the wrong answer the right question, or an answer to a question no joined was asking.”

Business Innovation Lessons Learned

Even the most successful visionaries have stumbled into these traps. Although an undisputed luminary, Google has launched a lot of products that never quite got off the ground. In 2010, the company unveiled Buzz, a sort of Twitter/Facebook/Gmail hybrid that allowed users to share status updates, links, videos and photos. It was killed a year later due to poor reception. Buzz essentially epitomized an Undead offering, falling outside the company’s core solutions. It was an answer to a social media question that nobody was asking.

Google Glass illustrated the pitfall of a Hidden Gem. The wearable device piqued interest and garnered an eager following, yet Glass wasn’t brought to market well. It was priced incorrectly, its use was restricted to a limited number of users and privacy concerns overshadowed the benefits of the technology.

More intriguing was Google’s decision to shutter Reader, an immensely popular RSS reading platform. As Wired magazine observed in 2013, “The Internet freaked out. Twitter users raised their virtual pitchforks in outrage. Bloggers wept, scrambling to find a suitable replacement by the service's July 1 death date.” Why did this well-received innovation get the axe? The majority of Internet users had begun consuming news differently than when Reader was introduced. Sure, Reader attracted a rabid fan base, yet those advocates had grown fewer in number. Maintaining the product simply became less profitable than abandoning it.

I would venture to guess that most innovation failures occur because of Feature Shock, which has rattled some of the world’s leading brands. When Steve Jobs returned to Apple after a 12-year absence, the company was barely afloat. The damage had reached such proportions that Apple had to change its licensing structure to secure a controversial $150 million investment from Microsoft. Other business leaders, such as Michael Dell, advised closing the company and returning the money to shareholders.

Jobs had a better solution. He eliminated 70 percent of Apple’s extraneous products -- hardware and software that had strayed from the company’s core offering. He redesigned everything around the Mac, which took its place as the “digital hub” for all innovation efforts. Just days ago, Apple was named the most profitable company for a third consecutive year.

There’s also the cautionary tale of Lego. After diverting its attention from the phenomenal success of its toy bricks, Lego launched ventures into theme parks, television shows, video games and toys outside the niche. Nearly all of these efforts failed with consumers. In response, Lego eradicated unnecessary components, sold off parts of the theme parks, cut unrelated product lines and stopped research projects outside the core. It did, however, promote new research to enhance the capabilities, customization and consumer base of its core toys. Since that time, revenues have increased 400 percent.

If Customers Are Buying, You’re Innovating

True business innovations seldom endure by their novelty or newness alone. They must present solutions to ongoing problems or alleviate key pain points. This is precisely why exponential technologies have gained so much traction. They’re improving lives and helping people transcend obstacles.

  • Though not a new trend, 3D-printing has caught its stride now that companies like Tesla are using it to build engine parts. Better applications of the technology to biological material and food will follow, according to Gartner.
  • Telemedicine services are becoming more prevalent as cost-effective health options to people living anywhere in the world, especially remote locations.
  • We have embarked on a new wave of wearable technology that will allow consumers to record their vital signs, including heart rate, oxygen saturation and various other metrics. This trend will extend beyond general fitness applications to a variety of uses in comprehensive medical, dental and visual health care.
  • Solar powered desalination systems have the potential to dramatically increase access to fresh drinking water in arid locations. This is already occurring in places such as Chile, Scandinavia and Kotri, a small village with 300 families in the Ajmer district of Rajasthan.
  • In Sweden, amazing “passive technologies” can capture the body heat of occupants to warm homes. The body heat from commuters passing through the central railway station is also used to heat nearby buildings.

However, if customers aren’t buying your innovation, you’ve got some soul-searching to do. Did the solution lack necessary features? Were there too many features? Was it priced correctly for the market? Did it alleviate customer pain points? Was its value apparent and perceived?

This isn’t an issue exclusive to product development -- it affects every organization and every service offering. Anyone involved in talent acquisition has encountered these impediments and setbacks. The traditional players in the staffing industry are struggling to innovate and monetize those innovations, especially as nimble players are pioneering new online recruitment technologies and sourcing channels.

  • Today’s top talent rarely spend much time on job boards. They expect different approaches to outreach and engagement via social media, video, mobile apps, texts and self-service platforms. Their values have shifted. Employment branding and corporate culture are imperative marketing strategies. Has your staffing organization progressed to embrace and capitalize on these new dynamics?
  • More in-demand candidates are passive, rather than active job seekers. Have you innovated ways to discover and captivate these workers?
  • If you build workforce technology, is it relevant and intuitive? Feature Shock can run rampant here. Adding more and more features to suit every need may be complicating the process for users or wandering away from your company’s core. For example, why spend time and resources localizing foreign currencies in the system if you and your clients have no need to staff internationally?
  • If you’re running an MSP that’s having trouble filling new or niche positions, are you engaging innovative staffing partners who have discovered unique ways to expand their recruiting networks? Simply adding suppliers to the mix only augments the complexities and overhead of managing more partners who may see no value in responding to one-off requests.
  • Are you pricing your solutions in a way that brings value to the client and your own organization?

These are just a few of the trends I observed when I began innovating Crowdstaffing. And the success has been measurable. Our scorecards are exemplary, we are profitable and consistently growing, we can deliver high-caliber talent rapidly, and customers are buying. By turning to a crowd-based recruitment model, we can engage hard-to-find talent, contain overhead costs, cover a broader spectrum of sourcing channels and reinvest in enhancing our business innovations, without losing sight of our mission.

Monetizing Your Innovation

In their book, Ramanujam and Tacke reveal, sometimes unconventionally, how organizations can monetize their innovations. Here are some of the top recommendations.

  • Consider a “willingness to pay” conversation with customers during the early stages of development. Understand if you’re about to create something of value. Let’s say you’ve conceived a way to bring in highly skilled workers that have eluded your customers, yet at a higher than average markup. If clients see the benefit and would be willing to pay, you’ve got a viable innovation.
  • Don’t force a one-size-fits-all solution across the customer base. Instead, try designing segmented offerings based on your clients’ willingness to purchase new solutions. However, it’s also critical to build those solutions based on the demands of the many and their willingness to buy, not just to satisfy the requests of a few clients. Does the cost of the effort justify the return?
  • Develop pricing strategies that look to the future so you can maximize short-term, near-term and long-term gains.
  • Involve marketing and business development teams in the design. Success depends on communicating the value of the offering. The message must be compelling and clear.
  • Maintain the integrity of your pricing. Don’t rush into discounts. If demand drops, exhaust all other avenues and make necessary modifications before cutting prices.

In this economy, competition is fierce and the pressure to innovate is high. Yet, any innovations we undertake must have purpose and meaning to our clients. To continue serving and expanding our customer base requires income. The advice laid out by Ramanujam and Tacke provides a solid foundation for making intelligent business decisions, delighting clients and growing our organizations.

Sunil Bagai
Sunil Bagai
Sunil is a Silicon Valley thought leader, speaker, motivator, and the visionary behind the groundbreaking Crowdstaffing ecosystem. Blending vision, technology, and business skills, he is transforming the talent acquisition landscape and the very nature of work. Prior to launching Crowdstaffing, Sunil honed his skills and experience as a business leader for companies such as IBM, EMC, and Symantec. "We need to think exponentially to mindfully architect the future of humanity, civilization, and work. When we collaborate and work together, everyone prospers."
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