The concept of cross-industry innovation is getting more and more attention. This is for a good reason. The combination of maturing industries and disruptive change makes the traditional approach to innovation within the boundaries of an industry less effective.
Nevertheless, it actually a bit of a surprise to me, since the idea of transferring ideas, practices and approaches from one industry to another has been with me for all of my working life. I wouldn’t have called this innovation, however. Now I am reading the inspiring book Not Invented Here: Cross-industry Innovation from Ramon Vullings and Marc Heleven and I think it is high time that somebody wrote this book.
Let’s start with an explanation of the idea
What is cross-industry innovation?
As Vullings and Heleven write:
“Cross-industry innovation is a clever way to jump-start your innovation efforts by drawing analogies and transferring approaches between contexts, beyond the borders of your own industry, sector, area or domain.”
The main idea of cross-industry innovation is that the patterns of thinking in most businesses are deeply rooted in the conventional wisdom of their own industry. Managers and strategists do what had proved to be the best way of doing things in the past. They praise their expert knowledge of their industry as a strong foundation of their success. This collective wisdom and experience effectively prevents the transfer of ideas from other industries.
Vullings and Heleven describe the problem as follows:
“The problem is that – in many cases – innovation is an extrapolation of the current situation. Incremental improvement is necessary and beneficial, yet it is not enough to gain a real competitive advantage or to find game-changing ways of working.”
“Best practices are not enough anymore since they are limited to the current scope of your industry or processes.”
Best practices are great; however, they have not been sufficient in the past, since they tend to produce clone businesses without a real distinction from competitors. (Article: The worst thing about best practices) They become less and less sufficient in our VUCA-world of disruption and blurring of industry boundaries.
Here comes cross-industry innovation as a solution: If you are not able to find a breakthrough approach within the mindset of your own sector – look for it in other industries.
“More elegant solutions already exist somewhere else – in another area, another industry, another sector – yet they are not recognized as a possibility.”
Is cross-industry innovation for every business?
The term “cross-industry innovation” may sound a bit big and even frightening for many businesses. Outside the league of the big players with the huge R&D budgets and institutionalized innovation initiatives many businesses are strugging with the mere tasks of being innovative at all and focusing their innovation efforts on marketable products. (There is a great article about that problem at Strategyzer: Should We Do It? Vs. Can We Do It?)
If you are already struggling with innovation within your industries boundaries, how on earth should you implement innovative ideas from completely different sectors?
It is not as difficult as it sounds. Here are my ideas for you.
Cross-industry innovation approaches feasible for every business
Read the book and see what works for you
I have already highlighted Not Invented Here: Cross-industry Innovation. Get the book and scan it for approaches that might work for you. Vullings and Heleven offer a wealth of tools, ideas, and ways to get into the cross-industry innovation thinking mode.
Replace the word “innovation” with “transfer of ideas” or whatever you feel comfortable with
You don’t have to start with the groundbreaking, industry-revolutionizing super-idea.
You will already be far ahead of most of your industry-peers if you adopt some best practices from other sectors instead of from your own. There are endless options. You might pick up an idea
- for an additional up-selling service you can offer your customers,
- or how to use modern data-mining techniques to better segment and target your customers,
- or how to reorganize warehousing,
- or how to bring your service to market,
- or …
Just be open minded.
Hire industry-outsiders instead of industry-experts
Most businesses prefer to fill their job vacancies with proven industry-experts. They prefer candidates with years of work experience in their industry, ideally from a successful competitor. There’s no doubt you need these people. But they are not the only ones you need.
Watch out from people from totally different sectors. All they need are the required problem-solving capabilities. They will inevitably bring you some cross-industry innovation ideas as a bonus.
I have worked with businesses from very different sectors throughout my working life:
- In my first job, I worked with small and medium-sized business in startup or turnaround situation from industries as diverse as specialty chemicals, heavy engineering, a hotel business, a manufacturer of bicycles, a dairy factory and more. There I learned to find out about the special features, business models and mechanisms of any industry quickly. It is just a matter of asking the right questions. And of listening to the answers.
Most of the problems these businesses encountered weren’t industry-specific but functional: problems to come up with a clear and distinctive value proposition, uncompetitive cost structures, false investments and so on.
- My second job was at a manufacturer of high-precision metal components. They had a wide range of products and served many different industries from consumer goods to heavy engineering and automotive.
- From there I changed to a specialized financial services provider. This bank was essentially a one-product business providing only financing solutions for commercial real-estate investors.
In all of these positions I was able to provide value with my ideas and patterns of thinking from outside the respective industries.
In virtually every job interview I was ever invited to I had to explain why I would be the best fit for that position despite my lack of industry knowledge.
Get rid of the “Not invented here” attitude
Also avoid the “We have always done it that way” syndrome. That brings us back to the book from Vullings and Heleven. I totally agree with them. It wasn’t invented in your industry. It was, however, invented in another industry and obviously it works well there. Why not give it a try.
Your innovation objective is not to re-invent something once again but to adapt and to adjust it so that it fits your industry.
Thus, you can truly make cross-industry innovation work for your business.