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“Innovation” and “regulation” aren’t usually words you hear in the same sentence. In fact, regulation is often seen as the antithesis of innovation and, because of this, highly regulated industries have been condemned to a world of outdated, inefficient processes and fear of failing to meet compliance standards. It is easy to assume that regulations have created an insurmountable barrier to entry, and that this is just the way its always going to be… But then again, that is what your competitors are thinking too.

We have worked with clients who have dared to tackle regulated industries and, when done well, it has proven not only doable, but fruitful. When a company creates a product that allows regulated industries to perform their job better, compliance with regulations becomes the starting line and that opens up opportunities for efficiency, quality improvements, and innovation.

In this article, I’ll walk you through 4 key takeaways from past clients who weren’t afraid to innovate in highly regulated industries.


Takeaway #1: Use Regulation to Your Advantage

When working with clients to generate positioning and messaging, we always emphasize the importance of establishing credibility — why should your customers believe you? But if you’re serving a highly regulated market, your credibility is easily established by demonstrating a mastery of the detailed regulations your customers are facing.

One of our clients takes it a step further, and has developed relationships with the regulatory bodies to be first to learn about regulation changes, so they can inform their customers and be thought leaders in the industry they serve. By incorporating regulation specifics into your messaging, you can demonstrate a mastery of the regulated industry and easily establish credibility and trustworthiness for your brand.

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Takeaway #2: “Innovation” Doesn’t Have to be Earth-Shattering

It is easy to think that your innovative new approach has to change the world, but in reality all you have to do to innovate is simplify your customers’ lives.

In fact, when working with highly regulated industries, your customers are used to such outdated processes that too much innovation would scare them off. One client came to us with such a simple, intuitive product — a large-scale database that allowed their customers to connect, track, and record data for multiple locations on one easy-to-use platform. It didn’t have to change the way their customers work, it just made that work faster and easier to do — as long as your customers are able to do their job better, faster, or more effectively, you have innovated.

All you have to do to innovate is simplify your customers’ lives.

Takeaway #3: Don’t be Afraid to Get Specific

Providing a product for a highly regulated industry means that, at least to start, you may have a one-trick pony — since the industry is so regulated and unique, your product should be specifically designed for that one industry.

If you try to be too much for too many, it can reduce your credibility and expertise, and could make customers think that you don’t understand their specific needs. When innovating, it is a good idea to start with one specific group, solve their pains, prove your value, and grow from there.


Takeaway #4: Your Target Market Should Want More Than Compliance

When defining a target market for your new product, it is easy to assume that everyone in a highly regulated industry should want it — after all, it is making their jobs easier and who wouldn’t want that? But if someone is only looking to comply with the regulations, they aren’t going to see the value you provide.

Innovating in a regulated industry is valuable because it makes compliance easier, so your customers have more time to focus on other things like process efficiency, quality improvements, or product innovation of their own. But if someone has no interest in going beyond compliance, they have no reason to go beyond what they’re already doing.

A past client in the medical device field built this exact idea into their messaging — they enable customers to go beyond compliance and seek true quality. They have made it clear that they are not just a compliance tool, but moving beyond compliance means good business for their customers with a direct impact on bottom line, better quality, faster to market, and reduced risk.


Regulation may seem like the enemy of innovation, but if you give those regulated industries a chance, you might just come across lucrative opportunities. While you may have to change your approach, the outdated processes and high compliance standards that come with this market are a recipe for success. And, if you find the right target market, you have the opportunity to be the reason these regulated industries get better, faster, and more efficient.

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