If Innovation Is Going Out of Style, Why Innovate?
By Jeffrey Baumgartner
Why the heck should you waste your time innovating? Surely there are better things to do in your seriously overworked day? That may seem a flippant question. But it is a relevant one. Business innovation has been a trend for some years but it is going out of style now. Hip companies today are focusing on the latest trends: wellness, mindfulness and big data. So, if innovation is no longer hip, should you continue to innovate and, if so, why?
The answer is, "yes", for three reasons: to keep ahead of the competition, to give meaning to your corporate vision and because it is fun. Incidentally, these reasons are way more valid than innovating because it is trendy or innovating for innovation's sake. Let us look at each of them.
Keep Ahead of the Competition
The only way to ensure that you are not overtaken by the competition is to keep ahead of the competition. The best way to do this is by providing a better product, convincing your customers that it is a better product and finding ways to produce your product better.
Providing a better product than the competition's requires not only that you continue to improve upon your product, but that you rethink your product from time to time. Indeed, it is this rethinking that leads to big innovations. A decade ago, Nokia was the leader in mobile telephones, thanks to great design, consistency of operation (if you replaced your old Nokia with a new one, it was easy to work out how to use the new one) and quality. Then the iPhone came along and it completely rethought the concept of the mobile phone, something Nokia had failed to do.
It is critical to bear in mind here that the competition is not limited to companies in your sector, as Nokia painfully discovered. A company in a different sector or even a company that did not exist a year ago could devise a product that makes yours seem hopelessly old-fashioned. Until a few years ago, hoteliers saw other hotels as being the competition. The AirBnb came along with nothing more than a web site and an app that has threatened the hotel industry, particularly hotels that cater to tourism.
Of course, not every innovation is a momentous one. The launch of the first iPhone certainly was, but Apple has been continually improving the iPhone. And they need to do so. Numerous other manufacturers, most notably Samsung, have introduced similar smartphones which would have stolen the market if Apple had not continued to innovate their product.
Not Just Product Improvement
Keeping ahead of the competition is not restricted to making your product better or rethinking it. It also involves looking at the processes behind the product. If you can find ways to reduce the cost of your product, you can either reduce your prices to tempt customers away from the competition or you can increase your margins or a combination of both. You can also improve the quality of your product so it becomes more reliable and more durable.
You can innovate your product packaging not only to make your product more appealing, but also to keep your product fresh (in the case of food), safe from damage and easy to handle.
Think about the business model behind your product. From a market perspective, the biggest impact of self-driving cars may be that people stop buying their own cars and subscribe to an Uber-like service. When you want a car, you reserve one on an app on your phone. At the precise moment, a suitable vehicle, for your needs at the time (a large car for a family trip, a small one if you want to go out to meet a friend), drives to your doorstep. No need to worry about parking, maintenance, insurance or even keeping your car clean. Just hail a car when you need one. Because there is no human driver, the cost of a ride will be much lower than it is now. Uber recognise this. They are investing heavily in self-driving car research. The result of this scenario is massive: fewer cars will be necessary, car dealerships may become obsolete, the car insurance model will change and more.
Give Meaning to Your Corporate Vision
Here are a few vision statements of global companies according to Alessio Bresciani:
Genentech: “To develop drugs to address significant unmet medical needs.”
Unless no new health issues ever affect anyone in the world again, Genentech will need continually to innovate in order to give their vision statement meaning. Having had the pleasure of working with Genentech, I know they take this seriously.
Google: “To organise the world’s information and make it universally accessible and useful.”
Not only is the world spewing out a phenomenal amount of information on a continuous basis, but marketers are continually looking for ways to give their products an unfair advantage on Google. Unless Google innovate continually, they will fail to organise information and the front pages of every search will be full of irrelevant sales pitches and porn. Indeed, this has happened in the past. If you have been using the Internet long enough to remember the web before Google, you will recall that by the late 1990s, web searches tended to result in links to irrelevant products of dubious quality and porn sites. This is because unscrupulous marketers found ways to rig the search engines of the day.
USAA: “To facilitate the financial security of its members, associates, and their families through provision of a full range of highly competitive financial products and services; in so doing, USAA seeks to be the provider of choice for the military community.”
There is absolutely no way the USAA can provide a full range of competitive, let alone highly competitive, financial products and services unless they continually innovate the products they develop for their customers, the United States military community.
Unless your vision statement is lame, the only way you can ensure it remains relevant and meaningful to your customers, your stakeholders and your employees is by innovating. Failure to innovate means that you will not keep up with a changing world and your company will become a bit of a joke. Ferrari's vision statement is, “To make unique sports cars that represent the finest in Italian design and craftsmanship, both on the track and on the road.” If the carmaker failed to maintain cutting edge design and apply innovate motoring technology, their cars would soon become out of date and their vision statement would be considered a joke.
You absolutely do not want this to happen.
Oh, and if your vision statement is lame, you really need to change it!
Innovation is fun. The creativity that goes into innovation is fun. Playing with ideas, developing them into ideas and making them happen is fun. Fun is good. If your employees are having fun, at least sometimes, they will enjoy their work more. That will make them more dedicated and more committed. They are less likely to be stressed; have you ever heard anyone say, "I am stressed out from having too much fun?"
Moreover, it feels good to work for a company that is perceived as being innovative. Google and Genentech and are not overwhelmed with job applications for every new position because their staff canteens are particularly good, but because these companies are innovative leaders. People take pride in working for such companies and that is fun.
Innovation is still important to any company that aims to keep ahead of the competition, give meaning to their corporate vision and have fun. Of course, you do not need to call it innovation. The word is so overused, it has become a distraction. Instead, just think of innovation as a super-handy tool for keeping ahead of the competition, giving meaning to your corporate vision and ensuring you and your colleagues enjoy your work.
What do you think?
A Promotional Message from Jeffrey
If you want inspiration and direction in terms of developing ways to keep ahead of the competition, give meaning to your corporate vision and/or have fun, I can probably help. Tell me where your company is now and where you want it to be and I will be happy to make some suggestions. The first few suggestions are with my compliments. Contact me and let's talk, confidentially and without obligation.
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