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The B2B world presents several obstacles to innovation that B2C businesses often don’t have to worry about. It requires a level of trust that’s absent in many competitive environments, and B2B company leaders are often stuck in the “protect the core at all costs" mentality — even if the core business is disappearing.
It is important to note that innovation is happening in B2B companies that value it and that those companies are performing quite well. If you’re struggling to innovate in the B2B space, here’s how you can combat five common problems:
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1. Stop Being Your Own Barrier
Business leaders often think innovation is off limits because they’re under the impression that innovation is only for the B2C domain, that it’s too hard, or that it’s an unrealistic option for B2Bs. But this is one thing both types of businesses have in common — if you’re not developing new ideas, you won’t last long.
Innovation requires hard work and risk, but it’s necessary for growth and longevity. Stop holding yourself back! Make the mental switch to playing your own game. Innovation demands that you carve out a new path. Don’t try to be a B2C or let your competitors change the game. Make new rules, and leave your competitors seven steps behind you.
Identify a core team that will own your early efforts. Support the team with investment, time, attention, access, and evaluation support. Manage them to new expectations of performance rather than the old rules of your business.
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2. Find a Focal Point
Many B2B organizations think innovation is a good idea, but they don’t know where or how it fits within their strategic priorities. Unfortunately, ambiguous efforts to innovate all look equally good (or bad), and the resulting unclear outcomes cause a needless waste of resources.
Assess your available resources, and put them toward the most critical areas for innovation. Don’t let initiative overload cause an innovation logjam.
Consumer products companies are increasingly practicing methods of portfolio optimization to nail down precisely which features of food products are important to consumers. The design-to-value approach often leads to minor changes in ingredients, recipe configuration, packaging, or shelf displays, but these adjustments can reap big benefits.
An equivalent for B2B companies might be to reconfigure their bill of materials for products or drive changes in supply-chain processes and logistics. The point is to look at small but critical areas where you can innovate to produce greater value for your customers.
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Treating your friends like enemies is the fastest way to lose them. B2B businesses often act overly competitive with other businesses in their industry when they should be working together. They withhold information from suppliers and customers that could improve performance across the entire value chain. Rather than giving you an advantage, this approach shifts resources away from forward-thinking innovation and toward enterprise survival.
Combat competitive tensions with open innovation. Lead the way to collaborations that will more closely tie your performance to that of your suppliers and customers (and their suppliers and customers). When you share ideas, everyone wins.
GE has developed an approach to open innovation that creates unique opportunities for addressing customer problems faster and more effectively than competitors. The company published an Open Innovation Manifesto that governs its entire approach to innovation in practice:
“We also believe that it’s impossible for any organization to have all the best ideas, and we strive to collaborate with experts and entrepreneurs everywhere who share our passion to solve some of the world’s most pressing issues."
With this approach, GE has succeeded in making innovation a central part of its strategy and has remained an industry leader for years.
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4. Pinpoint Your Users
B2C businesses have clear audiences. Apple isn’t confused about who is buying the next new iThing, but B2B businesses often struggle to articulate the specific users who will benefit from innovation efforts because of a longer value chain. This leads to overlooking significant opportunities for value generation.
Scan your value chain consistently. You must make an ongoing effort to focus on identifying burgeoning needs across as much of the value chain as possible.
To aid in identifying needs, engage with your audience on social media. Twitter isn’t just for B2C businesses. Caterpillar has defined four pillars in social media to ensure it keeps listening, offering support, promoting, and demonstrating thought leadership. These pillars help it offer value to its customers and the industry as a whole.
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5. Pursue Change
Perhaps the most detrimental of these problems is a refusal to accept and pursue change. Businesses experiencing risk-aversion in an attempt to protect their cores are ill prepared for inevitable change and won’t seek help in this area of weakness. They often die trying to relive their past successes.
Changing an individual’s mindset can be a challenge. Changing the mindset of an entire corporate culture requires laying a clear foundation before you act. It demands that you face your current circumstances with a clear eye and promote the understanding of the need for change effectively across the organization. I’ve had little success simply telling a stubborn person to stop being stubborn. Helping him see the reasons why he might want to change is hard work but likely to yield better results. Shifting market conditions require innovation to meet changing needs and recognizing those conditions is essential.
As a B2B company, innovation can seem like a daunting task, especially when you see how “easy" it is for B2C companies. But the bottom line is that innovation is hard work regardless of where it’s tackled in the enterprise. The key is recognizing this and not being afraid to forge ahead anyway.
If you can lead those changes rather than resist them, you won’t just survive — you’ll thrive.
About the Author: Andrew (Drew) Marshall is the principal of Primed Associates, an innovation consultancy. He’s a co-host of a weekly innovation-focused Twitter chat, #innochat; the founder, host, and producer of Ignite Princeton; and a contributor to the Innovation Excellence blog.