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Electronics distributor RS Components has placed innovation at the heart of its business strategy.

The company -- which is of the UK's authorised Raspberry Pi resellers -- is keen to come up with innovations to improve business efficiency and boost customer service. Here, Alex von Schirmeister, its chief digital, technology and innovation officer, explains how his firms finds its best ideas.

Different paths to find innovation

RS Components is open to creative ideas but the firm, says von Schirmeister, has had to learn which model for finding ideas suits the organisation best. "I'm a big believer that there isn't a single model that works for all companies. You need to adapt to the maturity and risk environment of the business," he says.

"We have some creative ideas that my innovation team controls single-handedly. In other cases, the innovation will be pushed by a single function within the business. When it comes to breakthrough innovation, we look for the ideas that might fail but, if they don't, could help us grow new businesses in the future."

SEE: Digital transformation: A CXO's guide (ZDNet special report) | Download the report as a PDF (TechRepublic)

That idea-sourcing process, says von Schirmeister, is operated like a 'Dragon's Den' scenario, where entrepreneurial individuals pitch to senior executives at RS Components. If successful, the firm funds their development.

"That's working very well for us," says von Schirmeister. "But that approach might be different in a year's time -- we'll keep evolving the approach. You must be careful not to innovate to the side of the organisation and to leave your business out of it. The challenge might be that you come up with a lot of ideas, you take them to the business and they might not be keen."

The key for digital leaders looking to adopt a similar approach is to work closely with the business. That joined-up approach might come at the cost of being slower to market with new ideas, says von Schirmeister. But it comes with the huge benefit of the new concept being customer- and business-validated.

"Our sweet spot for innovation tends to be the business," says von Schirmeister, recognising most great ideas are generated beyond his own innovation function. "Our people in the business are in touch with customers every day and have already identified real-life problems that customers are trying to solve. They will often have a captive market that's already there and asking for something."

The internal innovation team at RS Components tends to focus on the mega-trends which the business is less familiar with or just doesn't see a use for yet. One example, says von Schirmeister, is blockchain. "I don't necessarily expect a country manager in Italy or Indonesia to come up with their own blockchain ideas -- we might drive those ideas more centrally," he says.

When it comes to recent examples of internally generated innovation, von Schirmeister points to the AI and chatbot technology that is being used to bolster the advice given by customer service teams. Many customers call RS Components with technical queries. While the company holds strong internal expertise, it is often fragmented across areas of the business and its databases.

"Our customer services team would spend quite a lot of time looking for those sources," says von Schirmeister, who says agents use the chatbot during customer interactions. "AI has changed the game for us internally because we can pull from multiple sources, start to facilitate customer searches and offer a better experience. Like all AI, it's learning and getting better through every customer interaction."

Reaching out to external partners

RS Components is also eager to make the most of supplier-generated innovation. One of the firm's key partners is IBM; ZDNet spoke to von Schirmeister at IBM's Cloud Garage in London, where RS Components was launching a new community platform known as DesignSpark Marketplace.

The marketplace allows designers and engineers to promote, test and sell their inventions. This sales platform is a new function for DesignSpark, which is an online community of 650,000 members.

"A team within our electronics business identified that the engineers and designers had a fundamental requirement to exchange with each other," he says. "If you're a maker with a Pi and you come up with a gadget that helps home automation, you can offer your invention to the community. Members of the community can share and test their ideas."

The project has provided a range of benefits and von Schirmeister directs attention to the learning curve for internal staff. "When businesses try to innovate, people often underestimate -- even when they fail -- how the things you find out are something you can bank on for future initiatives," says von Schirmeister.

SEE: Special report: Tech budgets 2018: A CXO's guide (free PDF)

An obsession with the risk of failure might have led him to think the DesignSpark Marketplace was a risk too far. Instead, von Schirmeister embraced the opportunity. "When the team first came to me with the idea, I could have punctured 20 holes in the concept and thought of many reasons not to do it," he says.

"But the reality is that, when you have an innovation mind set, you need to keep checking yourself on your gut instinct and you need to make sure you purposefully slow down your questioning and natural protection mechanisms. Instead of saying no, you should ask why you wouldn't take a risk."

RS Components is keen to develop a portfolio of similar projects. "I also see us building an ecosystem of open source relationships," says von Schirmeister, before pointing to the importance of external relationships for innovation.

"If you want to experiment in VR, AR, cloud and blockchain, you will end up doing that with an ecosystem of partners," he says. "I'm a firm believer in the fact that, in terms of the future of technology, exclusivity will no longer work -- you will have preferred partnerships but you will no longer have a single relationship with a large IT vendor."

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