Strategy Based on Innovation
One of the most important topics that I discuss with C-level leadership is strategic planning for business growth. It doesn’t matter how good or how bad the economy is, all companies want and need growth. In addition, all companies need to face that fact that their strategy must include innovation or you will eventually experience slower and maybe no growth. Strategy based on innovation requires your organization to constantly find its next big revenue stream.
Most new companies start as an innovative new idea for a product or service—and your company is no different. Your company’s original creativity is what put you business, so I find it ironic that lack of innovation and creativity may be the very thing preventing it from growing. Innovation creates growth. Innovation keeps you relevant. It keeps you connected to your customers and your customers connected to your product.
Stop blaming the economy for your lack of growth. Unrealized growth is not the result of a bad economy. More than likely, it is the result of a bad (or outdated) business model. If your company’s strategic planning is not focused on innovation, it cannot grow in a sustainable way—in this economy or any other. Historically, companies that experience continual growth do it by staying in touch with their customers and generating new ways to solve their customers’ problems. Companies like Apple and Google—two of the most successful American companies—have grown into veritable empires by creating a corporate culture of creativity and innovation, and translating their internal wellspring of ideas into successful growth strategies. Most companies do the opposite. They tweak their products over and over using the watered-down ideas of executives who are woefully disconnected from their customers. Then they spend millions on launching “improved” (i.e. rehashed) versions that their customers don’t care about. I liken it to being a plumber on the Titanic. Failing to plan for innovation wastes countless man-hours, brain cells and budget dollars on sprucing up a sinking ship. It’s a flawed business model and a failed strategy.
In Blue Ocean Strategy by W. Chan Kim and Renee Mauborgne, the authors cleverly compare business philosophies through the idea of two metaphorical business “oceans”: red ocean and blue ocean. Most companies “sail” in red oceans by focusing too intensely on cutting costs and justifying their outdated product—it’s a bloody internal battle that keeps these companies looking very much like their competitors and results in everyone fighting for the same slice of the marketplace pie. But those very special companies that sail in blue oceans thrive by creating new ideas and solutions. The honeymoon period isn’t long, which is why blue ocean companies are perpetual innovators. Google mastered Internet search—a blue ocean idea—but now face several capable competitors so they must create meaningful ways to stay on top through new services like Google+. Apple’s iPhone was a blue ocean idea, but after Android phones created a more competitive smart phone marketplace, they introduced the iPad, which still has almost no viable competitors.
To be a blue ocean company, your strategic planning needs a foundation in innovation. Make creative ideation a regular part of your business cycle. Do the research and step outside your comfort zone to truly think like your customers. Learn what makes them happy and what makes them frustrated about your industry. What saves them time or wastes their time? Where is your industry missing the boat? Relieve their pain and you will win them over and bury your competitors. Stop peddling products. Think about solving problems.
So how do you pinpoint the innovation opportunities? Here are a few questions to get your team started in thinking like problem-solvers:
- What topics keep popping up at trade association meetings? Is there a need not being met in the industry?
- Talk to your clients. Ask them point-blank: How can we improve our offering?
- Ask your customers or do a targeted industry survey and ask about business pains. What product or service could you create that could solve the pains?
- Go online and follow discussions in your industry. Listen in forums and in industry groups on LinkedIn for the complaints and comments about your product or service.
- Brainstorm on this topic: If someone created a product or service that would put you out of business what would it be? Put yourself out of business with a new offering and you just might put your competitors out of business. If you don’t someone else will.
What is your biggest challenge to planning for innovation?
Howard Shore is a business growth expert who works with companies that want to maximize their growth potential through business consulting, executive coaching, sales force development, training, and employee selection. To learn more about him or his firm, please contact Howard Shore at 305.722.7213 or firstname.lastname@example.org .