Innovate or Die

Innovate and stay one step ahead. 

When developing a business, you can never stop thinking about innovation. For many business owners this is an intimidating notion – that the status quo, especially when the business is thriving, just isn’t good enough. There are many examples of once successful businesses that no longer exist because they didn’t believe they were vulnerable, and therefore refused to innovate. 

Remember Eaton’s? This retail institution couldn’t believe shifting consumer trends and competitors like Wal-Mart would adversely affect their business. And where are they now?

Many business owners operate under the “if it ain’t broke, don’t fix it” philosophy. They believe making changes to their business, especially if things are going well, is risky. But the opposite is in fact true. Peter Drucker, widely regarded as the “father” of modern management, stated: “defending yesterday – that is, not innovating – is far more risky than making tomorrow”. Because of the very nature of the way a capitalistic system works, as soon as something works, it’s obsolete. 

To be truly market driven, which is based on an “outside-in” approach, a business must be committed to innovation, which may be driven by factors such as:

  • changes in consumers, technology and competition,
  • new knowledge or ideas,
  • emerging opportunities. 
Innovation shouldn’t be limited to your products or services. Any number of areas can be innovated, resulting in a significant impact on business results. They include:

  • Service Delivery: Why do people spend up to 10 times more to have a package delivered by FedEx versus the post office? Reliable service. 
  • Marketing: When American Airlines first introduced a Frequent Flyer Program, it had a tremendous impact on revenues and revolutionized the airline industry.
  • Technology: There are more than a few on-line gambling billionaires who realized they could combine an emerging technology, the Internet, with man’s insatiable appetite for gaming.
  • Product Packaging: Dutch Boy developed a paint can with a spout that doesn’t make a mess when you pour. The paint itself is the same. Their sales increased.
  • Customer Service Strategies: Enterprise Rental Car “will pick you up”. Their customer service strategy has made them unique and increased their market share.
  • Guarantees: Great companies stand behind what they do. The Asian automakers continue to push the standard for quality, and this is reflected in their warranty policies. The Big Three American auto makers continue losing market share to the Asian manufacturers.
  • Business Processes: Wal-Mart is legendary for their logistics expertise. It’s what makes them dominant, even though they carry the same products as other mass merchandise retailers. 
Underlying products or services may be the same, but it’s innovation in other areas that influences the way a business is perceived by its target market. When we work with consulting clients, we use a tool called the “Innovation Matrix” to assist in identifying areas where innovation can be applied.  


INNOVATION MATRIX

       

What would make us…

More Competitive

Unique

Dominant

Service Delivery

 

 

 

Marketing

 

 

 

Technology

 

 

 

Product Packaging

 

 

 

Customer Service

 

 

 

Guarantees

 

 

 

Business Processes

 

 

 

Other

 

 

 

 

The ideas may not come right away, or perhaps aren’t immediately put into practice, but it’s the mind set we’re trying to affect. By continually thinking about how you can be more competitive, unique or dominant, OPPORTUNITIES FOR INNOVATION will become more obvious. It’s this willingness to recognize and take advantage of opportunities that enables long term success. The ability to innovate, like any other business discipline, must be developed and refined over time. When developing this capability, you must keep a few things in mind.
  1.  Don’t think in terms of the “Big Bang” theory. Innovations usually start small, evolve and gain momentum.
  2.  Keep it simple. Innovations don’t have to be complicated or expensive endeavours. Simple and focused innovations usually are the most successful.
  3.  Be alert to opportunities by keeping an open mind. Business owners often get defensive when customers criticize them – it’s as though the customer is an adversary. 

The truth of the matter is that this type of critique can shed light on opportunities for innovation. Google is “obsessed with the email they get criticizing their service”. This is the attitude that makes Google great. The most highly valued and enduring organizations NEVER STOP INNOVATING. Always keep this in mind as you build your business.

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