In his book What Would Google Do, Jeff Jarvis introduced the concept that businesses stop selling stuff, and start thinking about what business they are in. 

Having said that, Google is in the knowledge and organization business. A hardware store might be in the do it yourself business. Jarvis challenges us to think in new ways; to solve problems.

A recent Fast Company article follows in the footsteps of this thinking. Thomas Koulopoulos hypothesizes that businesses are not in the business what is being bought, but in how they act. 

Let’s explain this further. It’s not that far off from what Jarvis talks about in selling “stuff.”

Instead of thinking about the product, and making it faster, cheaper, or better, ask yourself why you are in the business you are in. What greater problem are you solving? How are you making the environment in which you operate a better one? And so, Koulopoulos concludes, your answer will be tied in with how markets behave.

Starbucks is a prime example. They aren’t just coffee, they are a “third place;” a place to meet, to gather, and/or to slow down. Google, for example, wasn’t the first to search, but they opened up the internet with tracking, ads, applications, giving us more and more ways to connect with our target markets.

The difference between the old and the new way of thinking? Stop thinking about innovating products and start thinking about innovating surrounding behavior.

Some characteristics of innovative companies: 

• Able to depart quickly from the plan and jump into a new opportunity.
• Take an active role in introducing new behaviors that were previously not thought of.
• They are able to do this quickly.
• They are willing to experiment, especially in the gray.

What to do: 

• Tie the innovation model in with the behaviors of the market;
• BUT, you can’t rely on your customers for this. They often don’t know what they want, to paraphrase Steve Jobs.
• Observe the market closely and identify ways to introduce new behaviors.

Facebook, for example, continues to innovate their product and each time they make a change, they get backlash from the market who hates change and then settles down and adapts to the new behaviors. Not every change works and they recognize it, but they aren’t afraid to take risks.

Innovation involves disruption. It means entering the unknown and risking failure. It’s high-risk and something no amount of focus groups or market research can help you with.

What business are you in?