Spark up the innovation engine
For organisations not already in the habit of continually developing new products or services, cranking up the innovation engine is much easier said than done. But as the global playing field continues to level and the barriers to new markets continue to fall, the pressure on companies to stay ahead of the forces of commoditisation is increasing.
So what should companies do? The answer: Persistently strive to serve your market better than anyone else. You may think you "own" the market or that you have carved out a reliable niche for yourself, but if you're not out there continually improving on what you do and developing new strategies to satisfy the needs of your customers, your business is at risk.
Thus, the question of the day: How does a stable, successful organisation built
on a tried-and-true line of products or services break out-of-the-box, begin to take risks, and introduce new concepts into the marketplace? There is no one right answer, but here are a few ideas to get you thinking:
Consider your perception of risk
Begin by thinking how new product ideas might affect your existing product lines. Will a new service offering undercut an existing one? If the answer is yes, consider what alternatives you have: Would it be even riskier to not introduce a new product? What is your tolerance for putting the health of an existing product at risk in the name of overall growth?
Think long and hard about this one. While one doesn't want to rashly undercut a successful business by introducing your own competition, sometimes there is no viable alternative.
Identify sources for innovation
Where are your new ideas or where will they come from? Is there sufficient creativity within the existing organisation? If the answer to the latter question is yes, how will you free up the right people from the existing business in order for them to think and act more creatively?
It can be awfully hard to ask someone to tend to the needs of the existing business while also trying to create the future. If your plan is to innovate externally, what sources will you tap into? Do you plan to hire full-time product developers, forge new partnerships or call upon existing relationships?
Think about how you define successful performance
One of the most challenging facets of any innovation effort, particularly one housed in a successful, mature business, is fair measurement. New products and businesses should not be subject to the same metrics as the existing business.
If you look at profitability and growth through one lens for both new and existing ventures, you won't get an accurate picture. On the financial side, don't be obsessed with profitability too early; top-line revenue may be more important early on.
And non-financials such as reaching key milestones in product development, getting meaningful feedback from the market, and signing key distribution agreements may well be more significant for financial performance in the early stages of a new business.