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Innovation in Large Organizations

By Doug Junkins, Office of the CTO, Innovation Lead, Guavus Inc.

The idea of innovation in a large organization seems to be an oxymoron. After all, isn’t it the domain of small, agile startup companies to be innovative while they disrupt the large, slow moving enterprise? Successful large enterprises in every industry are learning that they, too, need to be innovative in order to survive and succeed. In this blog I will give some tips to help large organizations overcome their inherent inertia to become more agile.

Small startup companies often think in terms of a Minimum Viable Product (MVP), which is a key concept of Lean Startup culture. An MVP is supposed to be the minimum set of features and infrastructure that a customer will find useful. The idea being that once you have an MVP, you can start to generate revenue and then extend the features of your product set to address additional markets.

Large organizations, on the other hand, are often not trying to introduce a new service or product to the market, but rather to make their existing products or processes more efficient or to address new markets. For this reason, large organizations should think more in terms of a Minimum Viable Improvement (MVI) instead of an MVP. An MVI should be considered the minimum set of new processes and/or capabilities that brings measurable business value to the organization. This concept is similar to the Continual Improvement Process (CIP) or “kaizen” approach developed in the 1990s.

Where large organizations can really see advantages over the previous CIP processes is in applying agile methodologies, like startups use to develop products, to their process or product changes.  By taking existing processes and services and applying analytics to enhance them, businesses can dramatically improve efficiency and effectiveness without the need to change the core process, product or offer.

MVI Innovation Example

Take the example of a Tier 1 mobile service provider who offers clients advertising via SMS messaging.  A restaurant chain came to them looking to launch a campaign, in which SMS messages would be sent to consumer’s mobile phone, encouraging consumers to download the restaurant’s free app.

Initially, the messages were sent to large audience segments, created on the basis of standard demographic information, such as device type and age group of opt-in subscribers. However, the ad campaign was costly, as it was being sent to millions of mobile users, and was yielding only average results – about .6 app downloads per every 100 message recipients.

Then the mobile operator made an improvement (we could call this a Minimum Viable Improvement).  They created a new target audience segment based on both demographics and consumer preference in content.  Using this combination of factors, they were able to create a much smaller and focused audience segment, one that they hoped would have a higher propensity to download the app.

Small Change, Big Results

The small change produced staggering results.  First, the percentage of consumers who actually clicked on the link in the message went from 2% to 8%.  Second, of the people who clicked on the message, 53% downloaded the app vs. 27% previously.    This resulted in a 7x increase in conversion rate!

Additionally, the cost to run the campaign decreased dramatically.  Because the messages were now sent to a more focused audience rather than a broad one (a few million people vs. multimillions of people), it cost less to administer the campaign.  Better adoption rates at a lower cost. A win-win.

At Guavus, we help service providers optimize the way they provide their services and offers and run their operations.  Using analytics to make improvements in processes and providing teams with the information they need, when they need it, we are able to dramatically change outcomes.  Small changes which lead to huge results!

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