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| The Role of Innovation & Common Sense |
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Companies which listened to the advice of non-executive directors (42% of those surveyed) had higher profit margins throughout a downturn. (Study conducted in the UK in the 1990). In fact, companies led by middle aged, well qualified people with prior experience at a senior position in a similar industry, were most likely to remain in business. Also business with small management teams fared well as did those which placed a high level of importance to networking and innovation. No-one is going to argue that innovation is a bad thing or that it has no impact. The real issue is, if it is so great, why aren’t more companies doing it? The word innovation, as used in the business world needs to change. Innovation is increasingly sought after, in a climate where all the cost-cutting in the world still isn’t going to let a company produce more cheaply than its competitors in the Far East or Latin America, or anywhere else for that matter. But innovation is not routinely part of the way businesses think and work. Bright ideas often fail to make it as viable product and/or service ideas. What is going on? What is going on is that there needs to be a paradigm shift in the way people look at this reality. Once uncertainty becomes "normal," it's no longer uncertain, and it is time to look at your business with a new set of eyes, maybe a set of hired eyes that have a more panoramic view. There are way more, but I will just mention 3 barriers to why companies just keep on doing what they are doing and don’t innovate: Lack of long term planning and focus. Many companies find it difficult to see a credible link between the broad notion of innovation and their own business growth. Smaller companies are often focused on maximizing the return from a successful product or service; those with more than 100 employees are working simply to remain secure within their own marketplace. These ways don’t work anymore. The only way to succeed and plan into the future is to find out what your current and potential customers need and come up with new solutions. Companies face new problems. So do something about it, and have a different mindset. Right now, while many admire inventive thinking and creativity, most also worry there is no bottom-line-pay-back and cannot justify the investment to make it happen. What are your alternatives? Lack of business process planning. Even where some companies actually believe in innovation, there is not much acting on it that happens. Again, mindset, leadership and planning have a lot to do with it. Addison already invented the light bulb, and not everybody is going to reinvent the wheel, and not every innovative idea is a product of a rare and gifted individual. Building, putting in place small steps and business processes which enable small but specific actions and routines, you end up with a product and/or service of demonstrably better quality. It doesn’t have to be a revolutionary action, but as part of a process of constant leading to betterment. Therefore, how about looking at the market, now, and asking: what would sell? I hear from companies that they cannot sell since customers cannot afford their services. Innovation or common sense, whichever is applicable in these cases, maybe it is time to look at your model and see what CAN and WILL sell in this economy and how you CAN help companies use what you have to offer? New markets. A huge barrier to innovation is the lack of clarity around ROI. The fear of risk is a powerful inhibitor, and taking a risk, better yet, a calculated risk, is many times what makes certain companies successful and stand out. Most companies need to have an idea of the sales they can expect before committing any resource. This is possible by gathering information, making data based and driven decisions, and having a plan as to the volume of sales they can expect before committing any resource. Especially now is a good time to look into international markets and assess opportunities. The US market has shrunk and one of the ways to grow is looking globally. Optimizing returns requires clear routs to market, which means connections with trusted suppliers and distributors as well as ways of informing prospective customers. These routes can take a long time to construct and need regular maintenance, which is often beyond the resource of smaller companies, but in reality, is anything impossible for the entrepreneurial mind and spirit? How can these barriers be removed? Define the issues and look at solutions to fit the issues. It is different for each company. Knowledge, experience, flexibility and long term vision and planning are part of the road map. Define your aim, and staying in business is not it. You want to shoot higher and make sure you have a clear direction as much as you can, based on the facts and reality. There are going to be winners in this crisis, and these are the companies you want to learn from. We stand at a precipice of global competitiveness but have the opportunity to make innovation part of the turbulent economy we are in. Therefore: |