Innovation, Hertz, Zipcar

Someone suggested yesterday that organizations in different stages of maturity might need different forms of innovation. He'd defined innovation as a 'better but different' process improvement i.e. not just incremental improvement but something substantially different that meant a process was getting done more efficiently, cheaply, productively in a very different way. An example at a market level is the way car rental process.

The traditional way is of the Hertz. Budget, Avis business model, and a different, newer, innovative way is the Zipcar model.. Now Hertz is taking on the Zipcar model. Connect by Hertz which launched in December 2008 and is now in various cities in the US plus London and Paris. At the time of the launch Hertz spokeswoman Paula Rivera said plans were already in place to expand to other locations. "We plan to go after the car-sharing market in an aggressive way". (wsj. December 3 2008). By April 2009 Hertz was claiming that its pilot was successful and had signed its first corporate customer (Marriott) – adding car sharing to 'its business travel portfolio', and in June added Xerox as a corporate customer.

So how long will it be before other traditional car rental companies start to compete with Hertz? How easy will it be for them to change their business models to take on this new way (for them) of car rental? Going from one business model to another is a challenge for most companies – changing not just the systems, policies, practices, and processes, and measures changes but also the mindset and management style – and many don't think through the implementation and execution of the new model. A perfectly conceived innovation is useless if it can't be implemented effectively.