Introducing a new innovation into an industry can be hard, especially when it is disruptive. When that industry is naturally conservative and risk averse then this challenge becomes harder, especially if you are a new entrant.
For example, the oil and gas industry has a history of innovation, from its roots in onshore production from reservoirs just below the earth’s surface to the present day where operators are drilling in hundreds of metres of water depth in some of the world’s harshest environments.
It is an industry that has some very interesting technology challenges, although many parallels can be drawn with other industries such as nuclear. Both are founded on innovation but operate in a highly regulated environment with significant technological, environmental and reputational risk factors. Therefore the introduction of innovations can be difficult.
There are a number of key factors that influence this, including:
Complicated supply chains
The majority of end users are very large companies with an extensive, and often complicated, supply chain. This results in it being difficult for SMEs to influence the final purchasing decisions as they need to convince the end user and the Tier 1 supplier (and possibly Tier 2 and 3).
- Tip: Understand the levers of power in your case and try to reach the decision makers with your innovation.
It is further complicated by the complex nature of large organisations. Often large companies have departments focussed on internal R&D or those that work with external R&D providers. Whilst this can help, it can be difficult to gain access to someone who will champion your product, particularly when dealing with multi-nationals with complex organisational structures.
- Tip: Develop your value proposition to present a well thought-out business case (that demonstrates key technical advantages along with financial and risk considerations for customers and end users) to key players.
There can be a disconnect between those whose targets are based upon the introduction of innovation and those more operational staff who are focussed upon production and who see innovation as unnecessary risk. This is an area where innovators may find it difficult to influence, particularly when they have to influence those who do not have innovation as part of their job description.
- Tip: The key here is to demonstrate you have planned for risk management, what your product key benefits are and understand the drivers for decision makers. This can help to reassure those decision makers who are averse to risk.
New market entrants
For new market entrants who lack an industry pedigree there can often be the ‘not invented here’ barrier where those who have been in an industry for a number of years discount innovations from elsewhere.
- Tip: Networking is a great way to help you get to know your target market, as well as researching into support organisation that can help you to introduce your innovation to market. Finally, see if you can find someone within the industry to champion your product. This can give you credibility if someone is promoting from the inside.
There is also the much documented challenge of getting a field trial opportunity. The cost and risk implications of a field trial of a technology can be so high that companies are reluctant to consider it or the planning and instigation of such a trial takes far longer than an SME was considering.
- Tip: This challenge can be mitigated by a comprehensive programme of testing and qualification to de-risk a field trial.
Whether a large or small company, cost structures often mean that it simply isn’t feasible to support the large number of new ideas that get presented.
- Tip: Innovators need to ensure that they fully understand the challenges that their potential customers have and clearly present how their new product will help overcome them.
About the author:
David Riddell is an Innovation Specialist who is trained as an electronic and electrical engineer. David spent his early career developing manufacturing processes for innovative new electronics products in the UK, China and New Zealand.