What is innovation – and why bother?

At Danish Young Hospitality Professional’s (DYHP) second event, innovation will be the topic of interest. Let’s get the fundamentals in place. Innovation does not just occur; it’s a creative process, applying and converting novel ideas into new or improved products, services or processes. Generally speaking, there are two types of innovations: incremental and disruptive. The prior is the result of refinements and modifications to existing products. The latter innovation type often occurs when new knowledge is required to exploit new market trends by creating new value networks.

The last decade is characterized by the increasing number of innovations and the increasing speed with which these are adopted. While the World is moving forward, the global hospitality industry seems to be stuck in the last century. Most – if not all – nearly and completely disruptive innovations related to the hospitality industry have been generated by outsiders: who were behind OTAs? Intelligent revenue systems? Automated check-ins? And I won’t get started on the first hospitality company to exploit the unbelievable growth in the sharing economy trend.

How come, for example, Silicon Valley is a place of extraordinary creativity? There, risks are take, money is invested and, most importantly, effort is put into the creative process. The hospitality industry is already infamously investment intensive, but we treat creativity is as something arcane, as if it is only applicable by the few while, in reality, it is a process, which can be managed – if the necessary risks are taken, the required money invested, and the essential efforts put into it. Our current conceiting conservatism must be broken; our fundamental uneasiness with the unknown deracinated.

Technology is the way

I will not go into the process of creative thinking itself as this short blog post would do it injustice. While this process can be expensive (it doesn’t have to be), there are ways that Danish competitors, who are lacking behind in comparison to the international hospitality developments, can play catchup without being too forward thinking. There’s plenty of inspiration to be found across the borders. While much can be said about the hospitality industry, it offers one of the most open cultures towards knowledge sharing. Why not make use of this? For example, creating an app that allows the consumer to check in, unlock the door, and adjust heating and lighting in the room…  that’s innovative! Or, it would be in Denmark at least. Internationally, it’s old news.

Simply applying existing technologies to products, services, or processes otherwise untouched by technology could be considered an incremental innovation – as long as it provides something new and valuable. For example, at the Henn na Hotel in Japan, they’ve utilized existing speech recognition software to allow a robot dinosaur to replace human receptionists. But there are many ways to go, some more expensive than others; some more valuable than others. Technology is one way.

Unknowns and knowns

Disruptive technologies make it a necessity for the industry to change, adapt and innovate. The service offering can also be reinvented by means of the business model (the core business) and the organizational design (internal processes). There’s plenty to be done with both. Discussing your business model can lead to groundbreaking changes; how does your organization create, deliver and capture value? I highly recommend Osterwalder and Pigneur’s model as a framework. Traditionally, you aim to do one of two things when working with the organizational design: differentiate from competitors or lower your costs. The host of DYHP’s next event, Urban House, chose differentiation by adjusting the traditional hiring process to be a more interactive auditioning; DYHP’s very first host is known for its culture, or, as they call it, ‘the Avenue feeling’; budget hotels like Zleep Hotels do the opposite by cutting costs, which is an obvious competitive advantage in this very labor-intensive industry.

Still, there’s only so much that can be done by thinking creatively. It’s time to be innovative! How do we rethink the industry? How do we make a company that is focused on operations become a strategically innovative organization? How do we talk managers into investing more in R&D to understand the consumers’ needs? Why do we not facilitate more creative processes in-house? How can we ensure the next big thing doesn’t come from outside techies?

One thing’s for certain though: DYHP is an innovative association that is already the facilitator of creative and skilled people, who will likely change the direction of the currently stubborn and traditional industry. Innovation must be at the heart of DYHP because who else but the new generation will be able to rethink today’s service offerings? We are, after all, the future of Danish hospitality!

For more about the relationship between innovation and hospitality, join DYHP and participate in the next event on November 26th, 2015.


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