In today's rapidly evolving business landscape, the ability to innovate is not just a competitive advantage—it's a necessity. What happens when businesses stop innovating? History shows that those who fail to adapt get left behind. This is especially relevant in markets that are changing more rapidly than ever.
To me, innovation goes beyond technology. It starts with curiosity, intuition, keen observation of things like patterns and then recognizing current and future challenges and opportunities within your business, markets and distribution channels of the industries you serve and their end user customers. Then, it's about tapping into a different part of your brain to ideate, create, try new things, and bring them to life.
The need for forward thinking
Long-standing businesses are often recognized for their forward-thinking approach and willingness to make disruptive changes: they see where the next ‘battlefield’ may be and move early into it. We pride ourselves on being thought leaders in the industry, not just by adapting to changes but by anticipating them and developing products, services and process responses.
Our commitment to innovation is exemplified by our investment in creating and scaling usage-based financing models. Embracing the growing trend of servitization, we began exploring ways to finance outcomes rather than products more than five years ago to meet evolving market needs.
DLL incubated and developed the concept of usage-based financing for a whole range of asset classes. Today, this offering, known as Pay-per-use, remains a cornerstone of our financial solutions. This evolution from prototype to mainstream product has opened new opportunities for our sales force, attracting manufacturer partners and dealers who have seen increased demand for their products through this financial solution.
Initial take up on this offering was slow with supply chain challenges. However, as lead times normalized and ‘traditional’ demand softened in some markets, the traction and attention garnered by this innovative product has increased over the past five years. We remained committed to this innovation and are now reaping the rewards.
Leveraging your companies’ capabilities to create competitive advantage
In today's interconnected world, the demand for consistent financing solutions that can be deployed across multiple countries and continents is growing rapidly. Many of our vendors and end user customers are multinational household names, seeking a consistent and reliable financing solution that can be agreed upon globally with their head offices or procurement departments and seamlessly replicated across countries.
Leveraging our unique global reach, DLL developed a Global Master Agreement that capitalizes on our scale, providing a sustainable competitive advantage with international partners and end users.
By offering a consistent and reliable solution worldwide, we ensure that our partners and customers can seamlessly manage their financing needs, regardless of their location. This not only simplifies processes but also enhances operational efficiency and supports global business growth.
Creating enhancements within a traditional model
Innovation is also about examining if and how a company can use its established activity system to create new revenue streams without disrupting the core. DLL’s direct business line has exemplified this by building a channel that now accounts for over 10% of our business. By leveraging our existing activity system—such as credit and asset risk expertise, relationship management prowess, deep industry knowledge, and local execution capability—we discovered we only needed to add a different type of sales professional to unlock the potential.
Despite being primarily a vendor finance company, we recognized the potential of a strategically positioned, direct channel. However, we were mindful of the impact this could have on our existing vendor relationships. By leveraging our specialties, expertise and innovative spirit, we avoided cannibalization and developed a win-win solution where opportunities from our direct teams could be reversed back into our vendors. This innovative approach has allowed us to bring added value to our customers and serve our existing markets more effectively. Our direct channel has not only become a significant part of our business but also an enhancement to our partners, demonstrating our commitment to innovation and existing customer satisfaction.
This idea derived from a month-long Executive Leadership program at Darden Business School UVA where I learned how Disney had created new cores. I applied this thinking to DLL’s business, showing how we could learn from other industries and the importance of continuous learning. This success story highlights the ability to use innovative thinking to unlock new revenue streams while maintaining the integrity of a business core model.
Leveraging existing resources
It's easy to underestimate the value of the resources right at our fingertips. However, neglecting these assets can lead to missed opportunities and unnecessary costs. By applying innovative thinking to our existing data and systems, we have been able to unlock new potential and drive growth.
By rethinking the capabilities of our systems, we have been able to service new and diverse products without compromising our core operations. For example, our robust inventory finance system has supported exponential growth in traditional pay as sold and scheduled pay commercial finance products. This system's versatility, redeployed by our own internal experts, has allowed us to extend our services beyond its traditional and originally intended boundaries, supporting the initial financing phases of large intralogistics projects, for example. This innovative usage approach of the system has enabled us to profitably service new product lines without the need to invest in new technology or software.
We possess rich deposits of data, and have begun harnessing its potential by investing in advanced data science capabilities. In just a year, we have developed in-house tools that deliver data driven insights and suggestions allowing our team to make informed decisions and offer focused solutions. This innovative use of data not only strengthens our relationships with partners and customers but also ensures that we meet the evolving needs of our customers with precision and efficiency. With the abundance of opportunities from resources such as artificial intelligence and other technologies, the future application of our data is bright.
Conclusion
Innovation is not just a strategy; it's a mindset that drives excellence and advancement.
The lifeblood of progress and a critical driver of success in today's dynamic business environment, innovation extends beyond mere technological advancements; it encompasses rethinking business models, enhancing service delivery, and continuously improving processes that can lead to new revenue streams and meeting market demands. Innovation, however, isn’t without its hurdles.
Our commitment to continuous improvement ensures that we learn, adapt, and refine our approach. How is your organization embracing this critical advantage?