Very sure that all of us listen to commentators talk about innovation on a daily basis. The key question that a lot of us have is how relevant is it to us in our daily professional lives? Why should we innovate when, your company may be earning a lot of revenue from the current portfolio of products. As a senior industry professional, how do we direct the organization in a direction to innovate and stay ahead of our competition?
Innovation is of 2 types – product innovation and process innovation. Product innovation is about inventing new products and process innovation is about better marketing/ sales/ management strategies. Indian companies have generally been good at process innovation and have relied on European countries for product innovation. However, it is product innovation that really matters as it is products which attracts consumers to a company.
Product innovation is taken very very seriously in western countries – especially in America. Two of the most important business leaders of this century – Steve Jobs and Jeff Bezos have put it beautifully as to why innovation is important.
“A lot of companies have chosen to downsize, and maybe that was the right thing for them. We chose a different path. Our belief was that if we kept putting great products in front of customers, they would continue to open their wallets.” – Steve Jobs, founder Apple Inc.
“I think frugality drives innovation, just like other constraints do. One of the only ways to get out of a tight box is to invent your way out.” —Jeff Bezos, founder Amazon.
One common philosophy of innovation that has helped them to do 2 diametrically opposite things –
- Get consumers to pay more for good products and
- Give the lowest prices possible to the consumers!!
Thus, innovation is one of the best strategy that keeps your company recession proof and can help you stay ahead of your competition.
Similarly, having a culture of innovation in your company can help you achieve a goal that you have set for yourself. Please note that innovating is not just about setting up an R&D division, but rather it is about having a mindset that focuses solely on making our consumers’ lives better. When people set out to innovate, the ultimate goal is to come up with products that creatively destroy existing products, .i.e. a new product that leaves the existing products obsolete and useless. This is a scenario that you want your competition to face always and it can only be achieved if your organization has a sound culture that promotes innovation.
Having said this innovation is extremely difficult to achieve and implement. You need some of thee best minds in the World to innovate. Inability to have competent engineers and product gurus is a major handicap and that can hinder your progress significantly.
The second challenge is implementation. Coming up with a good product is important, but understanding how one can fit it in the current portfolio is a major challenge. This is a tough call as that product may be your company’s main cash cow and replacing it with something completely different is tough.
The challenge here is that your competition can also come up with a similar product and its launch could push you out of the market. The opposite of this could also be true. You may launch this product and still despite all the research indicating otherwise, the product fails royally and it results in a huge loss.
In both the cases – it is the CEO who will be held responsible for not managing the situation effectively. There can be no correct answer for these types of situations. Every case will be different and has to be analyzed in a different way. However, one thing which can be done is to be prepared for such situations, by being updated about these situations. One must keep reading about these as it helps you to understand the impact of the actions taken by CEOs.
BSE Institute Ltd (BIL) teaches subjects about implementing innovation in its Advanced Management Program (AMP). It is a course designed for senior industry professionals of major companies. You can learn more about it on their site.
Innovation is tough work. Sometimes, people spend their entire lives without making significant progress and finally quit, only to see someone else use their research in an entirely different way. It is finally all about what your point of view about it is and how you manage to handle it. As someone aspiring to be a CEO, it is your eye for innovation that distinguishes between a leader and a follower.