Innovation is a word that most times sounds so bogus that it can almost pass as a fluff word!
I am an innovative expert. Well.
Hello, can you tell us what you do and quit being vague.
Data science, Big data, Machine learning, are new words that buzz a lot in the tech space in this 21st century.
Data is the new Gold.Popular Opinion
Logically, the Gold (Data) needs to be mined and put to practical use.
The advancement in technology has made it so that he who controls the majority of the information in the world is the most powerful. More recently, even the speed of receiving and processing the data is paramount.
Speed of Information
In 2008, Spread networks invested in a $300 million tunnel to reduce the speed of round trip sending of trading information between New York and Chicago by about two milliseconds. (A millisecond is one-thousandth of a second). Before launch, traders on wall street were bidding tens of millions of dollars in entry fees and rights to be exclusively on the network. It was the birth of HIGH-FREQUENCY TRADING.
The rapid development of information technologies has driven the reality that data is an essential resource in our world today. Nonetheless, while data is a highly accessible resource, it is not sufficiently exploited.
Subsequently, this singular ideology has formed the basis between trade wars between world superpowers.
Privacy and security of data are now taken seriously, and the minutest of breaches has cost conglomerates billions of dollars in fines.
Data is the new capital of the global economy. As organizations seek renewed growth, more robust performance and more meaningful customer engagement, the pressure to exploit information is immense.Deloitte
The KPI way to innovation (Data-driven innovation)
Data-Driven innovation is one of the technical terms that gets thrown around a lot in innovation focus groups.
KPI stands for Key Performance Indicators
KPI is a measurable value that demonstrates how effectively a company is achieving key business objectives.
- The KPI way to innovation is relying on data from past performance to make projections for the nature of the market in the near or distant future. – These projections help in detecting consumer pain points through analysis of consumer behavioural data. An innovative experimental approach applies this data to produce new products and or adapt existing products to achieve an excellent product-market fit.
- The KPI way to innovation uses surveys( the famous landing page test, among others), and feedbacks generated through honest diversified consumer base to create data. The data generated serves as a guide through the process of developing new products and or optimizing existing ones.
The definition of innovation is one that’s always changing. The only way to stay ahead and in the game is to have access to real-time data that bears a true reflection of the markets and the factors that affect it.
KPI’s ensure that the performance of a company/product is keeping deliverables in close comparison to its goals. The data collected in developing KPI’s serves as a scorecard for the company or particular product.
In recent years, there has been a decline in the sales of Sedans in America. This decline is a phenomenon that can be easily spot on an adequately drawn KPI chart. This information can help a company pivot production toward the fast-moving SUV market. This shift to SUV’s is a necessary pivot that may be needed to keep a business afloat in these times. And staying in business might as well be regarded as the most creative acts of all.
How does KPI present a valid basis for innovation?
KPI is representative of having a target, a measure to determining targets and creating a reporting framework that helps accountability.
Examples of KPIs for a business for a typical business
- Growth in Revenue
- Net Profit Margin
- Gross Profit Margin
- Operational Cash Flow
- Customer Lifetime Value (CLV)
- Customer Acquisition Cost (CAC)
- Earnings Before Interest Taxes Depreciation and Amortization – (EBITDA)
The right combination of KPI’s differ from organization to organization.
KPI is a reflection of the sector, goals of the business and strategy used in accomplishing the set goals.
Check out this post on product-market fit and see how innovation plays a crucial role in getting the right product into the right market.
Advantages of Data driven innovation
Innovation = Invention+ commercializationProf Ndubuisi Ekekwe
Understanding market behaviour is critical to the success of a product or service in any market.
Data-driven innovation helps ensure that inventions have a commercial value.
The inventions achieve this seamlessly as products are build from a clear understanding of the market. This understanding provides very little chance for these products to fail.
I could have tried to add many more advantages. However, this(mentioned above) is a major advantage of Data driven innovation - one worth taking particular note of.
Hence, analysis of user data was performed, and it showed that individuals were using the Quicken platform extended to using the platform to run their business accounts.
Quickbooks was developed and adapted to cater for the finance of businesses.
House of Cards
House of Cards was one of Netflix’s pioneer programs.
In 2013, 86 per cent of their subscribers claimed they were less likely to cancel their subscription because of this one show alone. However, through data analysis, Netflix knew the show would be a hit before it launched.
From the analysis of data sets, Netflix uncovered a correlation between fans of the original British House of Cards TV show and fans of both Kevin Spacey and David Fincher.
The amalgamation of these three elements in one show produced a classic!
Data helps in making the right decisions, charting the right course to growth and moving ahead no matter the landscape of the sector you might find yourself.
Data-driven innovation refers to innovative applications derived from data sets. It is a call to take the collection and use of data to a whole new level.
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