Innovation is the process of creating better solutions to meet new challenges. When organizations use it effectively, they can create new opportunities for themselves. As Peter Drucker puts it – “Innovation is the specific instrument of entrepreneurship. The act that endows resources with a new capacity to create wealth”.
The power to go beyond the existing possibilities also gives them a competitive advantage in the market and opens the doorway to success. While there have been many companies that have achieved huge success initially, the inability to keep innovating has pushed them into the dark corners of history. For instance, we can consider the example of Sears.
Chicago’s tallest building may still be called Sears towers by many, but it has officially been renamed to Willis Tower. Once the tallest structure in the world, it now ranks a lowly 14th. Similarly, Sears – the largest retailer in the US until 1989, is also on the verge of going bankrupt in 2016, as predicted by The Economist. The reason, as one might have guessed it, was the inability to innovate. The result has been numerous lost opportunities that have driven it to extinction.
Decades before Amazon became a household name, the maximum number of people in the United States shopped at Sears. In its heyday, Sears was a market leader by a distance, topping the mail-order sales across the length and breadth of the country. The year was 1931. Within a few years of its inception, Sears had become a retailing-giant and a symbol of growth and prosperity for US citizens.
Then, something went wrong. Smitten by an overwhelming success, it became complacent and got stuck in its rut, while its competitors (like Walmart, Target, Home Depot) regularly adjusted to shifting consumer habits. Desperate to abate the stagnation, and yet unable to innovate in its core field of Retail, Sears dabbled in many other business lines that were new to it, while innovative competitors like Target & Amazon chewed away into its turf.
At the other end of the spectrum lies a prominent courier-service company.
Transporting more than 10 million packages around the world per business-day can be a logistical & operational nightmare for any organization, but not for FedEx.The challenges it faced during the course of its existence have driven it to develop better solutions. Within a decade of its inception, its founder’s idea of creating a system that achieved delivery of time-sensitive shipments had conceptualized an entirely new industry — the hub-and-spoke express-shipping. But Fred Smith-led FedEx didn’t stop there and went ahead to create an impressive list of many firsts. From FedEx PowerShip® – the first PC-based automated shipping system to FedEx® Tracking and SenseAware®, the courier-giant has always been at the forefront of innovative technology.
With an eye on connecting people and possibilities by providing better solutions, FedEx over the years has pioneered remarkable advances. Therefore, it can be said that innovation is an important differentiating factor in the above examples and can have a remarkable effect on the progress or even the overall existence of an organization. It forms the crux of the very spirit of entrepreneurship and just cannot be ignored. Inculcating innovation in your businesses is important but more important is finding a way to do it. Here are a few ways that will help to drive your business in the right direction.
Often, innovation can be confused with the technology improvements that an organization subscribes to. But innovation is about overall improvement. Leaders should define the ways to include radical and even incremental improvements, which might not be limited to the technological aspects but to all the domains and functions that make up the organization. For instance, when IBM and HP were dominating the personal-computer market, they sold most of their products through stores; Dell came up with a radical idea that redefined its position in the industry.
It eliminated the middleman and started selling directly to consumers. With the advent of the Internet, Dell’s method of distribution and sales, backed by exceptional customer service, skyrocketed its profits and competitors were left whiplashed. Thus, Dell showed that the application of innovation is not just limited to the products and services, but even to the way, an organization goes about its business.
Inspire Innovative Culture
Creating a work environment that encourages out-of-the-box thinking is one of the ideal ways to permeate innovation in the very fabric of an organization’s culture. When Mark Randall, VP of creativity at Adobe, took up the task of creating a culture that encourages and assists experimentation in his company, it was more than a challenge.
But over the years, the serial innovator has got his teams to develop and deploy numerous products, which combined have sold over a million units and generated over $100 million. Randall successfully infused the innovation culture that converted into huge profits. Inspiring teams and guiding them in the right direction could take any organization to a new level of success.
Focus on the Future
It’s one thing to innovate, but another to utilize these inventions for commercial gains in the future. Let’s take for instance the popular story of Xerox. The company’s 914 photocopier, launched in 1959 was a technological marvel of its time. It was one of the most successful products from Xerox ever and revolutionized the document-copying industry.
Meanwhile, the research division of Xerox at Palo Alto, California made many more technological breakthroughs, and the list comprised of some of the most startling innovations that included laser printing, graphical user interface (GUI) and many more. But Xerox was caught up in its success and never focused on these inventions, turning a blind eye to the future. Other companies like Microsoft & Apple “borrowed” these innovations to make billions.
By seeing these examples, it is safe to say that innovation is not a one-time action but an ongoing process. Businesses run on ideas and successful businesses need “great ideas” to keep growing; thus, it is Innovation that helps to drive the vision that the entrepreneur had when they started the company. Organizations that wish to succeed must embrace it or risk dying.
Read More: 3 Examples of Radical Innovation