Got a great idea that will make you millions? A look at the airline industry shows it's what you do with it that counts
Innovation is an elixir in this globalising, competitive and rapidly changing world. But few seem to fully understand or to have mastered it with confidence.
To some, it is the application of new technologies in resolving business and life challenges; to others it is a pervading attitude and culture that bring about improvement across the entire organisation.
One thing is for certain: it revolves around change, and change is something we are soaking in. Did you know, for instance, that one day last year saw more email traffic than the whole of 1990? And that the tax take from the UK economy has more than doubled in 10 years? There's a lot of change about, so it makes sense to see what lessons we can learn from the leaders in innovation.
One industry being buffeted by the storms of change—and from which we can all learn lessons—is the airline sector. It is simultaneously grappling with the benefits of its position at the heart of the trade and tourism industry, and its evolving pariah status as the harbinger of environmental doom.
This is an industry operating in a vice-like regulatory and political grip, yet time and again it offers innovative solutions to competitive challenges.
Perhaps the boldest move in the last 20 years has been the emergence of low-cost airlines, which have brought easy access to economies—from Bergerac to Bratislava—that used to be difficult and expensive to access.
The innovation was not as simple as painting everything orange and dressing the cabin staff in jeans—it was the fundamental reversal of the pricing model for air travel, making the early seats cheap and the remaining ones increasingly expensive as availability shrinks. In the future, the pricing models in the hotel, print and freight-transport industries—all of which are characterised by lumpy, expensive capacity issues—will also be turned on their heads.
Ryanair has boldly gone where no scheduled airline has gone before: its innovation strategy revolves around efficiency and the stripping of cost at every level. The basics of clean, modern, safe and on-time planes are delivered, while customer care is relegated in importance. It's a pay-as-you-consume model, which is well aligned with a sensible environmental approach.
At the other end of the scale is Silverjet, a business that has innovation in its DNA. This fresh British company has thought through every aspect of its service using an innovative mindset, with the result that customers feel more like allies than enemies. It's a private-jet experience, in which every detail, from onboard laptop power to a separate ladies' loo, has been considered. For the cost of premium economy, you get a 30-minute check in, a carbon-neutral flight and the knowledge of flying with an airline that banned Ken Livingstone for complaining.
Other airlines, meanwhile, have focused on introducing product innovations. When British Airways redesigned its club-class seat in the 1990s, it set in motion a wave of cabin redesigns across the industry.
But the trick with all innovation is making a success of the ideas. It's not as difficult as many think to generate winning ideas, but to successfully exploit them is hard. You only need to look at the expensive BA tailfin-rebranding disaster in 1997. It was a sound idea, designed to reposition BA as a colourful, forward-thinking, global airline. But it failed in the implementation phase by not preparing for the reaction from Virgin, who successfully played the Union Jack card, and for Margaret Thatcher, who publicly panned the new designs.
And if you're still not convinced that it's all in the implementation, try booking a seat on MAXjet, the transatlantic, business-only airline that folded in December. It was a good idea when it launched in 2003, but exploitation is king of the innovation jungle.
Alex Pratt OBE is founder of Serious Readers (www.seriousreaders.com) and an adviser to the government on innovation and skills.
Posted 2 May 2008 : Director.co.uk