Recently I had the great pleasure of participating in an Innovation Forum (IF) in Melbourne hosted by the charming and charismatic Ben Rennie of Uncluttered White Spaces. It was a brilliant evening with a great panel, an engaged audience and some lively discussions.
Innovation is a curious term that means different things to different people. My own definition is to create something valuable out of nothing. This could be something major like the invention of the iPhone or something smaller like a local restaurant adding a new menu item. It all starts with an individual imagining what is possible – this leads to creativity and ideas – then a lot of hard work to crunch the details through – then with any luck a successful new product/service/process is implemented.
But how do you rate whether an innovation is successful? Here are four criteria that I use:
- It must provide enhanced value to your “customers”
- It must provide an enhanced point of differentiation from your competitors
- It must provide some protection for the business from imitation
- It must produce an acceptable ROI
Remember the old saying – customer service is not a department, it’s an attitude – well the same applies to innovation. Creating a culture of curious people with enough freedom to explore new ideas is a good start to encourage innovation. Business leaders must be courageous and understand that in an innovative organisation mistakes will happen (even more than you are used to). It’s important not to penalise these but rather use them as learning experiences to understand what doesn’t work.
- Nostalgia – living in the past and unable to move forward
- Denial – believing that the current course is the correct one, even when it’s obviously not
- Arrogance – allowing pride and ego to interfere with good business choices
It’s hard to change some of this stuff. First you have to admit there is a problem. I have seen a number of companies go into denial at this point. Some eventually move forward but for others the public admission is too painful and personal. But if you can, you’re on your way to a better future.
Here is a challenge that I have set the teams of some of the businesses that I have been involved with – have 10% of your revenue in 12 months time coming from products or services that do not exist today. This might seem daunting and it is intended to be. It motivates people to start thinking creatively and forces the business leaders to make innovation a priority. Some businesses achieved less than 10% and some a lot more but in almost every case it forced positive change. Almost all are better off as a result – not just financially but culturally as well.
The market is constantly evolving and continuous innovation is the means by which you can keep up and even get ahead of likely trends. Sit where you are and you’ll eventually get overrun by your competitors or be deemed irrelevant by the market, or both. Kodak ignored the market shift to digital cameras and Motorola did the same with smart phones – both refused to innovate to take advantage of changing market needs and consequently lost the positions of market leadership that they had held for decades. Neither has yet recovered. Don’t be like them – innovate or perish – the choice is yours.
Have a great week!
About the Author: The Bull. The Bull is a Melbourne based entrepreneur and businessman who writes for uncluttered white spaces. The Bull works with organizations both large and small on strategy, business, coaching and performance management and is regarded as one of the leading experts in retail in Australia.
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