Monday, August 12, 2019

Long Tail Innovation

The frequent disruptions and fierce competitions push businesses to speed up and grasp growth opportunities by exploring “long tail” innovation or all sorts of breakthrough. 

The long tail is a business strategy that allows companies to realize significant profits by selling low volumes of hard-to-find items to many customers instead of only selling large volumes of a reduced number of popular items (Investopia). Long tail innovation is truly about focusing on the needs of customers and taking a unique path of doing innovation or solving problems creatively.


 

Long tail customers: Nowadays, business changes so frequently and so quickly, competing through cost-efficiency as a business strategy is much harder to survive. The lightweight innovative technologies or exponential growth of information provide great opportunities for companies to reach the “long-tail” customers that was impossible or uneconomic in the previous age with information scarcity. More fundamentally, long-tail innovation is customer-driven, when businesses can truly understand or attempt to capture the data-based customer insight to figure out what customers actually want, it is the moment that they can reach the “long tail” customers; that is, how to get beyond just the top strategic initiatives and figure out how to provide niche products or services to many customers. It’s about introducing niche products or services, or taking new methods or practices of production, utilizing new resources, or opening new markets. Innovation is in the eye of the beholder - customers. Customer-centric innovation is in strong demand and should be an easier path to grow the innovation fruit because digital is the age of people, choice, and empathy.

Long tail business model
: A business model is the set of features of a company that keeps it in business. Today’s digital business environment is unprecedentedly dynamic, complex and uncertain, the emerging technologies or continuous disruptions can push you out of business if you are not agile enough to change your business model or update your strategy timely. There are always players starting with different resources and competitive position. If you have a strong business model, a set of core business competencies and value-generating skills that match “the long tail' customers’ needs, you are often building a competitive business advantage because such a business model is difficult to copy, at least in the short term. For many companies, it is increasingly difficult to differentiate from their competitors, at least partly due to various factors.  If you have the commoditized products/services in a highly competitive marketplace, then a “long tail” business model could be more important to you as you can provide niche products or services with few or no competitors. Having lots of customers in your corner cannot hurt. In fact, the next strategic breakthrough may well come from one of these long tail innovation initiatives.

Long tail problem-solving: Thanks for the great convenience brought by digital technologies for learning, sharing and collaboration.Organizations today can engage the mass of people to brainstorm and solve a small set of the most challenging problems in their industry or cross-domain, and shape the “long tail” style of problem-solving. It’s about leveraging digital variety for brainstorming and gaining new ideas, involving a wider stakeholder group and encouraging participation. There is also sort of the “Long Tail” knowledge perspective - only 20% of the knowledge (a small percentage of knowledge) in some subject helps to solve the 80% (large percentage) of the existing problems. It could mean that a radical innovator does not need to master all or most of a subject. Rather he/she is skilled at gleaning only the essential knowledge which is relevant to the problem that the authorities have either bungled or overlooked. For long-tail problem-solving and innovation, it’s about building up a momentum that draws creative contribution from the participants that they have not previously conceived or understood they were capable of, ensuring the access of the maximum number of potentially good ideas internally and externally and increase the odds of finding the next great new ideas for overcoming the challenges.

The frequent disruptions and fierce competitions push businesses to speed up and grasp growth opportunities by exploring “long tail” innovation or all sorts of breakthrough. Winning the digital dynamic means engaging creative thinking, enforcing cross-functional collaborations and building unique business competencies. Keep in mind, people should be at the center of innovation management and they are the major focus for innovation process and accomplishment.

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