Business need to innovate to survive. Those that don’t will be overtaken by their competition
Think of how Amazon has dominated retail – leaving long established brands in their wake. More and more are seeing their business fail because someone has innovated quicker than them. To avoid this fate, global corporates would be wise to harness the same innovation as the new digital competition.
But innovation is a tricky thing to achieve. Businesses must first locate the pain points for their customers. Once these are discovered, the challenge remains of creating the solutions to these problems. To do this, they may need to look outside of their own organisation.
Collaboration equals innovation
Many industries still operate in a very traditional manner. Take insurance – the processes and the customer experience hasn’t really changed in decades. It’s not suited for today’s tech-savvy customers, who have become accustomed to running their lives on smartphones.
Many large businesses seek to introduce new platforms, apps or other digital services to modernise and improve customer engagement. But all too often, these projects face many internal hurdles that mean they rarely get off the ground – from siloed teams slowing the project down to overestimating what the existing IT infrastructure can do.
But there are many young tech firms who have already developed the right solution or idea, but don’t have the scale needed to immediately implement it. That’s why collaboration between big business and startup tech firms is necessary for both parties.
The two complement each other. Big businesses are secure in their industry, have the resources to implement change, but are often slow to do so. Startups are born from innovation and can move quickly, but don’t have the same resources.
One provides the idea, the other the resources to bring it to life.
Transforming from the outside in
Looking to re-engineer how we deliver car insurance, we have taken this lesson to heart.
We partnered with a three-year old insurance technology firm, Wrisk, to digitally transform our car insurance provision in the UK. We worked very closely with the Wrisk team to develop a platform for our insurance products in the UK, designing how it would work, what it would offer and, most importantly, how it will improve the user experience.
The result? We have been able to modernise how we deliver insurance, taking a digital-first approach. For Wrisk, they have become the main supplier of BMW and MINI Car Insurance in the UK – securing their first B2B customer in the process.
This approach means both businesses can massively benefit from this collaboration. But it never loses sight of the end goal – to improve and future-proof the customer experience.
Driving change in the organisation
Our work with Wrisk is an example of how global businesses can work collaboratively with innovative young companies to drive the creation of new services, products and change. It ensures we can remain competitive.
This is the philosophy that led to the creation of the BMW Innovation Lab, our technology incubator in the UK. It sees us work with startups from around the world to develop new ideas and provide the young firms with the tools they need to grow – and potentially a customer at the end of their time there.
The Lab also has another side-effect: it is changing the culture of our business. Working with startups is showing us another way, breaking down internal siloes and making us move quicker.
In the next 20 years, many industries are set to change beyond recognition. Automotive is no different. It is not enough to say that innovation is important. Organisations must adopt a culture of innovation that runs through the entire business.
If the decades since the advent of the internet have taught businesses anything, it is that we cannot just trade off a name alone anymore. Heritage has currency – people always trust a brand they know – but it does not mean a secure bottom line anymore. If there is a more convenient option, consumers will vote with their wallet.
This is why businesses must innovate what they do and how they interact with customers. But the important thing to recognise is that innovation isn’t just an outcome. It is a continual process. Large needs to work with small to develop creative ideas and ensure the customer gets what they need.
About the Author
Philip Kerry is Sales and Marketing Director at BMW Financial Services (GB) Ltd and is a key sponsor for start-ups in the BMW Innovation Lab.
Philip has previously acted as Chief Operating Officer for BMW FS in the UK, as Chief Financial Officer for BMW FS in both the UK and Australia, as Managing Director for BMW FS in Ireland and has worked in BMW’s Head Offices in Germany.
Philip, a Birmingham University graduate and qualified accountant, first joined BMW from HSBC in 1997. In total, he has over 20 years of experience in the Financial Services sector.
