I don’t think there is ever a good time to stop innovating – in fact I believe it is a core value to drive innovation on a daily basis for all successful businesses.
So I was amazed to see that E.ON – one of the UK’s leading energy suppliers – is to close its innovation arm.
Energy brands are often viewed as a commodity service and consumers are encouraged to switch suppliers based on the latest price deals – especially true when their prices are regularly increased as they are at the moment.
This is exactly when innovation needs to play it’s part by adding new value to customers.
Surely there are lots of opportunities for E.ON to help us change our consumer behaviour and usage of energy. Not just in providing innovations such as renewable energies and services that make our energy usage more efficient but also in amazing general customer service and marketing initiatives that create more valued & loyal customer relationships.
I’m sure that E.ON will say something like ‘innovation is core in our business and doesn’t need a separate business unit’ but from my experience a company as large and important as E.ON this is not enough to deliver the big changes that are possible.
At at time when there are a number of small businesses developing interesting new energy propositions such as the Nest learning thermostat in the US the big energy suppliers – like the big telcos before them – run the risk of becoming even more like a ‘price led commodity’ than ever before.
Still, all the time energy suppliers are able to set and follow their competitor prices in a ‘near-cartel’ fashion maybe they are content not to take the risk and effort to invest in innovation and simply suck-up the almost guaranteed profits that the sector provides.
I hope this is not about the lack of value of innovation to energy companies but perhaps more to do with their ability to harness and execute it properly in the business.
Sometimes you read something and you go ‘wow’. This week I was reading about how a designer called Izhar Gafni has designed a rather cool looking bicycle made largely from recycled cardboard and aimed to be produced for under $10!
As someone that has recently got into the cycling boom in the UK and having spent well over £1000 on a lovely carbon fibre bike I’m intrigued about the potential of a bike that weighs about the same and yet could cost much, much less.
Clearly the bike isn’t designed to win the Tour de France but it has the potential to be truly great because it addresses a number of key innovation success criteria:
- An inspiring and exciting story that will be rapidly shared – ‘surely you can’t cycle on a cardboard bike’. Clearly both the intrigue and fantastic design create a really exciting story that has the potential to generate huge amounts of media coverage and of course offers the sort of ‘talkability’ that many brands aspire.
- Unique position in a large growing market – I’m assuming that there are not too many folk as creative and determined enough as Izhar to have been spending the last two years in their sheds creating the perfect cardboard bicycle. I trust he has also been smart enough to protect the IP then he could enjoy a unique position in a large market for some considerable time.
- Keeping the offer simple – Not only is the bike design beautifully simple but the idea itself especially the low-maintenance aspects of the bike are fantastically simple. It’s easy to know what this offers and of course how a sales person can sell it.
- Opens up big new customer market opportunities – not only could this address the obviously large market potential in developed and developing markets for ‘low-cost’ bicycles but the additional angle of ‘easy maintenance’ hits another massive consumer need for convenience. Not only that but the more environmentally conscious audience opens up yet a third key customer target group.
Not only am I hugely impressed by the innovation in the product itself and the massive potential market opportunity but mainly I’m struck by the sheer focus and determination of this great innovator to prove that the impossible can be possible.
Whether this cardboard bike would really survive the often wet and pot-holed roads of the UK or even ever be produced at such aggressively low costs still remains to be seen but this is the kind of simple but challenging innovation that gets me really excited.
Good luck to them.