about the process and ways to improve. Post-prototype assessment will help you to develop a good perspective on the value of rapid prototyping and lessons learned.

THE PATH TO FASTER SUCCESS

A customer example from the organization I lead, Kenco Innovation Labs, will give you an idea of how these recommendations can be applied in real-life situations.

In one case, we were asked to help a customer address the problem of excessive retail chargebacks. We went through the discovery process, interviewing and mapping the experiences of several of our sites. We developed the customer persona based on our findings and clearly defined the current state in the education phase (answering the question “what does this look like right now?”). We brainstormed several ideas and applied the matrix of prioritization during the research phase (answering “what if we could…?”), and presented the top idea—which allowed us to capture proof of our compliance with the customer’s shipping requirements—to our governance council, which then approved the prototype phase.

We completed a prototype mobile app and Web portal in 90 days. Response was overwhelmingly positive (answering “what works?”). We kept the prototype simple, although all of the stakeholders could see that much more functionality could be added to enhance the solution. Upon receiving governance approval for funding, resources, and our proposed timeline, we moved forward with development and implementation. The return on investment (ROI) is proving sound, and customer response has been extremely positive.

Two other examples of the benefits that can accrue from
the development and implementation of a sound innova-
tion process come from Philips Lighting and Enterprise
Rent-A-Car. Both of these market leaders have a deep cul-
ture of innovation, resulting in new offerings that change
the way services are provided to customers and fuel strong,
continuous growth.
x At Amsterdam’s Schiphol Airport—the fourth busiest
in Europe—Philips is providing “light as a service.” 5 When
confronted by the large costs of converting to more econom-
ical lighting, customers were sometimes reluctant, or unable,
to make the investment. Philips came to recognize that it
wasn’t necessary for it to sell lighting ownership. Rather, the
company proposed that the airport enter into a long-term
agreement to pay for the light it uses, while Philips retains
ownership of all fixtures and installations. Philips describes
this as a move toward “access” rather than ownership. This
is not the only such lighting-as-service contract. Philips first
developed it for the Washington Metropolitan Area Transit
Authority (WMATA), which now has 25 parking facilities
that are covered through this arrangement. The innovative
lighting-as-a-service system led Fortune magazine in 2014
to recognize Philips CEO Frans van Houten as one of the
world’s top 25 “Eco-Innovators.”
x In the automobile rental market, the traditional model
was built around airport-based locations, where the custom-
er could easily walk up to the service counter. Enterprise
Rent-A-Car looked at the potential benefits of operating
near business centers and residential areas, and realized it
could open up an entirely new market by providing cus-
tomers with a ride to and from its local rental offices. This
innovation, which could have been introduced by any of
the then-established players, has proved to be extremely
popular. By 2015, Enterprise was the largest rental car com-
pany in the United States as measured by cars in service,
locations, and revenue. 6
These are big companies facing big challenges, but orga-
nizations of any size can use innovation to modernize
methods, upgrade services, improve the bottom line, and
strengthen customer relationships.

To be successful at translating ideas into action, a high level of discipline is necessary. Start by carefully and methodically defining and establishing innovation parameters in the governance stage, and follow through with education, research, and rapid prototyping. By following the process described in this article, logistics and supply chain services can be innovated quickly, at relatively low risk, and with a good likelihood of success. c

Notes:

1. Gartner Inc., “Gartner Says 6. 4 Billion Connected ‘Things’ Will Be in Use in 2016, Up 30 Percent From 2015” (November 12, 2015) http://www.gartner.com/newsroom/ id/3165317.

2. Linda Naiman, “Design Thinking as a Strategy for Innovation,” Creativity at Work, http://www.creativityat-work.com/design-thinking-strategy-for-innovation/.

3. Open Innovation Community website, http://www. openinnovation.net/about-2/open-innovation-definition.

4. Agile Manifesto, http://www.agilemanifesto.org.

5. Mark Faithfull, “Pay-as-you-go lighting arrives at Amsterdam’s Schiphol Airport, Lux (April 20, 2015) http:// luxreview.com/article/2015/04/pay-as-you-go-lighting-ar- rives-at-amsterdam-s-schiphol-airport.