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Written by: Alex Pirouz
There are several reasons why the generation of new ideas can be critical to your business’s success. Although every organisation will have its own priorities and sector-specific issues to balance, businesses that fail to innovate run the risk of losing ground to competitors, losing key staff, or simply operating inefficiently. Innovation can be a key differentiator between market leaders and their rivals.
Innovation can help you discover what opportunities exist now, or are likely to emerge in the future. Successful businesses not only respond to their current customer or organisational needs, but often anticipate future trends and develop an idea, product or service that allows them to meet this future demand rapidly and effectively.
Innovation will help you stay ahead of your competition as markets, technologies or trends shift. If you don’t have innovation as a key strategy in your business then you are risking being left behind, hence it should be a key part of your business planning.
In the past, many organisations have been able to survive even with very limited amounts of innovation. They focus on providing quality products and simply update them to a level that maintains their competitiveness in the market. This method still applies to some products with long lifecycles and few opportunities for innovation.
Recently however, some trends have emerged that drive the innovation process. Due to factors such as globalisation and outsourcing, there is an increased push to improve efficiency and effectiveness of organisations. Organisations need more than good products to survive; they require innovative processes, go to market models and cultures that can provide better value to the market on an ongoing basis, fast.
Consumer expectations also drive the amount of innovation in the market. Customers are used to products that continually improve and make their life easier. Modern consumers are more informed and have more options in terms of what they buy and who they buy it from. Essentially, customers won’t accept mediocrity because they know they can always go somewhere else.
I recently spoke with serial entrepreneur Con Georgiou. Con was the co-founder of Velteo, a company that helped integrate culture with process and technology for some of the largest organizations in the country.
Velteo’s high performance culture and ability to innovate well ahead of the market to its ultimate success when the business was bought by an overseas competitor.
“Rapid innovation is the only sure way to stay competitive. With various demographic, technical and economic shifts affecting how value is created and consumed the only way to grow shareholder value is to out innovate the competition. Velteo innovated on sales and service practice solutions by integrating cloud and mobile technologies with cultural initiatives that ensured adoption.
In a sea of competitors where the market went from cottage players to global consultancies within three years we needed to innovate our ‘edge’ on an ongoing basis. This was only possible by prioritizing innovation in an agile manner whilst ensuring a culture of safety and inclusion was maintained to inspire and surface hunches that inevitably became great ideas that we tested and released with customers.
This led Velteo to invent and deploy a world first social service platform for one of Australia’s largest Telcos. Australian companies need to re-discover how to invent and architect their companies to enable this if we are to compete as a nation.” Con Explains
When Steve Jobs returned to Apple after his twelve years of wandering, the company needed a controversial $150 million investment from ‘arch rival’ Microsoft to stay afloat.
Even worse, when asked what he would do if he were in Jobs’s shoes, Michael Dell said, “I’d shut it (the company) down, and give the money back to shareholders.” Rather than give up, Jobs was able to use these ‘indignities’ to fuel an amazing comeback. In a very short period of time, Apple grew to the most valuable company ever.
What was the ingredient that brought Apple from the brink of failure to achieve such an amazing record of success? While there are several candidates, the one that stands out quite clearly is innovation!
If innovation has this potential, how can you use it as a tool to power your company’s success? Here are five ways:
Create an innovative culture
To create an innovative culture, managers need to make sure that all employees know that innovation is a job requirement. It should be woven into the fabric of the business and given a prominent place in job descriptions, procedures, and performance evaluations.
Embrace failure
Innovative companies recognize that failure is an important step in the process of success. They understand that with each failure, the company moves one step closer to success. In this way, failure is given a positive value.
For example, if a successful product brings in $1 billion in sales, and it takes nine failures to achieve each success, each step in the process (including the nine failures) can be viewed as bringing the company $100 million in additional business – a positive way to look at failure.
Look forward
Bill Gates is fond of saying, “Success is a lousy teacher. It seduces smart people into thinking they can’t lose.” To be innovative, you cannot be afraid to obsolete your own products. If you are, others will obsolete them for you. That is what happened to Kodak and many others.
Marketing Information System
The marketplace is constantly evolving and changing. To be successful, you need a system that continuously monitors the marketplace, collects feedback in real time, analyses the feedback, reports the unvarnished truth to decision makers, and takes corrective action. What worked yesterday, may not work tomorrow, and the information about tomorrow is often available today.
Necessity is not the only mother of invention
Apple chose innovation at a point in their history when they did not have much choice. For them, necessity was the mother of invention. Time will tell if Apple will continue to innovate now that Steve Jobs has passed.
Wherever innovations come from, however they are done, and in whatever part of the business they occur, you need to continuously innovate or risk dying.