Innovation in the Nigerian Insurance Industry
In business, innovation can come from a variety of different
sources. Sometimes it is the result of specifically focusing on creating new
ideas, whereas other times it can be unexpected and the result of a spontaneous
reaction to a particular need.
The main source of business innovation is directly from
employees. Your employees know the specific part of the business that they are
involved with very well. Therefore, innovations come naturally to them. As they
go about day to day operations, employees identify areas that are in need of
improvement or could be done differently. Often, they will have their own ideas
about solutions to problems or ways to address certain needs. Encouraging
employees to bring these ideas forward and then supporting their development
can significantly increase the amount of successful innovation in your
business.
Employees can also be asked to specifically focus on
innovation. Many businesses set aside time and conduct group ‘brainstorming'
sessions to encourage the creativity and the generation of new ideas that the
business can investigate and pursue further.
Another important but commonly overlooked source of
innovation are customers. Your customers know what they want and often have
innovative ideas about how their needs could be better met through new products
and services. Taking the time to listen to what your customers are saying can
greatly increase the
amount
of innovative ideas that flow into your business.
Your business competitors can also be a source of
innovation. The important thing to remember is not to simply copy the products
your competitors are successful with, but to analyze them and work out what you
could do better. Consider what makes their product a success and try to
innovate on that so that you have some form of market advantage over the
competition.
In some the insurance industry, the importance of research
and development departments cannot be overlooked. Organisations must invest
large amounts of resources into research and development in order to come up
with a new idea that they can make commercially successful. However, you can
also conduct research on a small scale by conducting customer and employee
surveys or analysing your past successes and failures.
Understanding how to identify and utilise the potential of
these sources of innovation is important to the success of any business in a
competitive market. Avoid focussing on any one source of innovation and try to
be open to new ideas wherever they happen to come from.
As part of the innovation process, you will come across many
different ideas, some of which will be better than others. In terms of
innovation in business, proof of concept refers to demonstrating the
feasibility of an idea. The purpose of this is to show that a concept or new
idea has the potential to be utilised in a practical and successful way.
The first step is to screen all of the ideas that you
receive to identify and separate the good from the bad. Idea screening will
help you to eliminate unsound concepts and ideas with limited potential,
allowing you to focus on ideas with the greatest chance of success. Rather than
trying to pick the best idea straight away, try to eliminate the weaker ideas
first. By process of elimination, you should be able to come up with a
shortlist
of high quality ideas with good potential.
Some background analysis of the intended market will also be
useful at this stage. As the idea is still only in the early phase, this
research just needs to cover factors such as market needs, potential customer
base, possible product lifecycle and foreseeable risks.
The proof of a new concept or idea is the next step in the
development of a product or service. It is a fundamental part of the innovation
process and can begin as soon as an idea is mentioned. For example, in a
meeting an employee might suggest a potential new product, immediately followed
with some statement or justification to back up how or why it could work.
As an idea is further explored, it can be established as to
whether or not it is even possible to make and implement
,
how much it could potentially cost and whether or not there is any market for
the idea. At this early stage it may not be necessary to have exact data or
information about the specifics of the idea's potential, but merely an estimate
of what the possibilities are or are not.
As the idea gains support and momentum, a business should
aim to conduct some research and forecasting into the specifics of the project.
This is particularly important if resources are limited or if it would be
expensive to move onto the prototyping stage without sufficient back up and
support for the concept.
If an idea can be proven as a viable concept, it moves to
the prototyping stage. This part of the innovation process involves developing
and building an actual working model or representation of an idea. A prototype
can be a complete, full scale, functional model or may simply demonstrate a
small component of an overall idea. Prototypes may or may not be designed to
look like the final product, depending on the scope of the design.
The modern trend in proving concepts and developing
prototypes is to use computer modelling and simulations. These simulations of
new ideas offer many benefits over conventional prototyping as they allow you
to make an infinite amount changes and compare different versions of the same
model. Computer generated models can be cheaper than building physical models
however the hardware and software does have a high initial outlay.
Product Development
The development stage is where many great ideas lose
momentum and fail to make a significant impact on the success of a business.
This can be due to a range of contributing factors, but is often caused by a
lack of support and resources. It is important to carefully manage the
development stage to ensure that innovative ideas are able to reach their
potential.
The development stage generally requires the biggest
investment of resources of all the stages of innovation. This is because it
takes a significant amount of effort to turn an idea and a basic prototype into
something that is actually commercially viable. Many great ideas fail simply because
of their poor execution and delivery in the market.
Product development involves taking the original concept and
any available prototypes and improving and adjusting them until they are ready
to be released into the market. As each version of the product is developed, it
needs to be tested and evaluated for reliability, consistency, quality,
effectiveness and other advantages and disadvantages such as simplicity of
design and cost of manufacture.
It is important to avoid cutting costs at this stage as any
mistakes or oversights during development can cause major problems later on.
Perfecting the product during development will ensure that there are no
surprises or unexpected expenses and delays when it comes to commercialisation.
Remember that speed to market is important but
will make
no difference if the product isn't what consumers want.
The development stage also involves further market research.
Developers need to know what the final product should look like and what
consumers think are the most important features and functionality. This
research can be conducted by getting groups of potential consumers to review
different designs or by surveying targeted consumers on what they would be
looking for in a potential product.
Once a final design is decided upon, development should focus
on making the final version of the product ready for commercialisation. This is
where the development team will need to start working to specific guidelines
and boundaries including NAICOM approval, cost and ease of manufacture.
Ideally, no further changes to the product should need to be made at this
stage.
The main problem product development faces is that an idea
can pass through many different people, departments and organisations, each
with different objectives, before it is ready for sale. For example, an employee
has a great idea for a new product that will fill a gap in the market and has
great potential. They want the product to be of the highest quality,
manufactured locally and better than anything else available, with many new
innovations. However, the product developers and testers decide that the
product will be difficult to make and unreliable, so they simplify the design.
Finally, the accountants and marketers believe that the product will be too
expensive and believe that it could be made significantly cheaper if the
product was made overseas and the quality was reduced.
The problem is that the employee's idea is never actually
delivered to the consumer. By the time it passes through each stage of the
innovation process (idea, prototyping, development, commercialisation), the
idea is watered down and moves further and further away from the initial
concept. In the end, the product arrives in the market alongside many similar
products and fails to be innovative at all. The potential advantages of the
original product are lost along the way and the investment may fail to generate
returns.
