During the past two weeks, I’ve been busy translating much content into my mother tongue, which is German. Together with two colleagues at Bangkok University’s Institute for Knowledge & Innovation, South-East Asia (IKI-SEA), I co-authored an extensive academic chapter for a new upcoming book on Digital Transformation to be published in German later this year. And once I completed this project, I thought I could quickly translate the questionnaire of our TIPS innovation profiling tool into German, too.
I left my homeland, Germany, 22 years ago to move to Asia, and usually, I do all my writing in English. The last formal German publication I did was the book containing my doctoral dissertation. So, doing the translation into formal German wasn’t a no-brainer for me. (Fortunately, Google Translate came to my rescue, and I was amazed how good their translation programs already are — but that’s another story for another day).
So, why am I telling you all of this? When I contemplated what topic I could write about in today’s blog, I realized that translating content into another language is one of many strategies to leverage. And leveraging is a key creative strategy to multiply the revenues that a company can make with an innovative product. Please allow me to explain.
What is leverage?
The word “leverage” has many meanings, some of which belong to the financial realm (which only indirectly plays a role here). Among others, leverage describes the action of a lever or the increased force gained by employing a lever. But it can also represent a strategic advantage or a power used to accomplish something, such as the enhanced power available to a large company.
In our context here, and particularly for a large, mature company, leverage also means how to multiply the revenues from existing value propositions (products, services, solutions, and experiences)? (An earlier blog post on modern innovation types also touches upon the concept of leverage in innovation).
“Give me a place to stand, and a lever long enough, and I will move the world.” —Archimedes.
How can you leverage? How can you use it lift revenues from billions to zillions?
So how can we play with the concept of leverage to multiply our revenues? What kind of “levers” can we apply to gain a strategic advantage from our innovative value propositions that we created? Here are three pathways you may follow:
Option 1: Leverage by using digital networks and technology:
Since its advent in the 1990s, the Internet has provided tech companies with a gigantic lever to reach millions of users globally, quickly, and cost-effectively. This new digital channel has enabled tech start-ups to grow their users and revenues exponentially and driven the Fifth Wave of leading-edge technological development.
Another way to leverage technology is by offering digital products on more than one operating system. For example, when Apple launched iTunes in 2001, it was only available on the Mac. In 2003, Apple made the software also available for MS Windows users, which allowed the company to reach hundreds of millions of new users of the dominant operating system (OS). Later on, Apple also leveraged new devices by extending from desktop-computer-OS to mobile versions on macOS.
Option 2: Leverage by moving into different countries:
One well-known way to multiply the revenues of your company’s products, services, and solutions is by offering them in new markets. Often but not always, such market expansion requires you to translate your contents into the local language of the new market (as described above). You might also have to adapt your products to fit the local culture, consumption preferences, or regulatory constraints.
Option 3: Leverage by targeting new target customer segments:
Another way to leverage is by broadening your customer focus to reach out to new, so far untapped customer segments. Typically, this requires you to create modified versions of your products that cater to the distinctive needs of the new target customer segment. Among others, you might leverage by targeting another generation (e.g., moving from a focus on Boomers to Gen Y) or broadening your client universe from a business to business (B2B)-only focus to a combined B2B/B2C-model (B2C = business-to-consumers). You can also broaden your focus from a premium market to a mass market by creating product versions with fewer thrills and low-end brands (such as many hotel chains have done as a strategy to leverage their services).
For example, one way to possibly leverage Thinkergy’s creativity and innovation solutions, in the long run, could be to create unique creativity training versions for kids and teens. This broadening of our main B2B focus might allow us to get a small slice of the lucrative Pre-K and K-12 markets that makes up 63% of all revenues spent on education, a market that is forecasted to grow from six to ten trillion USD by the end of the decade).
These three options are just some pathways to applying the concept of leverage to multiply the revenues of your business. There are many other possible levers that you may use, and as you’ve probably noticed, some of the pathways to leverage also overlap.
Conclusion: Let leverage work its magic on your revenues. (A word of warning, though)
“Leverage is power.” —Robert Kiyosaki.
Leverage can be a powerful principle to multiply revenues indeed. However, to make it work its magic requires that you create novel, original, and meaningful (= creative) products first before you leverage them. Why? While leverage is a faithful servant, it is also a neutral force. If you leverage a “wow!” product, you can quickly reach millions of new users. But if your product is mediocre(or even sucks), millions of new users will find out about this and associate your brand with lousy value for money. So first focus on creating a wow product (= creativity from zero to one), then launch (creativity from one to a thousand) and grow it (creativity from a thousand to a million) before you start leveraging it (creativity from a million to zillions).
Moreover, be aware that greater leverage often creates greater complexity — and requires additional investment in technologies, operating systems, languages, market regulations, and user archetypes that you have to cater to and manage effectively. So that’s another reason why you ought to apply leverage with care —and ideally only at later stages of the company life cycle— to avoid overwhelming your organization. (And of course, here it also helps if your products not only wow because of the value they provide, but also because of their relative simplicity).
- What other levers come to your mind that can help you to multiply your revenues of an innovative product? What other ideas on how to leverage your innovations do you have?
- As noted above, there are different types of creativity. The ideas of how to leverage your innovative products are related to the kind of “creativity from a million to zillions.” I plan to talk about these different types of creativity in greater depth in a separate article sometime down the road.
- I also discuss how leverage is a powerful innovation strategy in the context of the compendium of modern innovation types in two sections of my new innovation book titled “The Executive’s Guide to Innovation.”
- Would you like us to up the creativity of your team or company in one of our innovation training programs? Contact us and tell us more about you and your team.
© Dr. Detlef Reis 2021.