Business Success by breaking the mold- Innovation

Etymologically invention and innovation have different origins. Invention is related to ‘find’ or ‘discover’ and innovation comes from the word ‘novus’ which means ‘new’. Invention implies discovery of something new to the world. When we think of inventions the images of scientist conjures up like Newton and Edison. The importance of ‘new’ for an organization stems from the fact that it must enjoy steady stream of revenue from the market to recover costs and generate entrepreneurial reward. The dynamic nature of the forces around the organization creates tensions between the firm and its customers. The new ideas must be generated and translated into actions which open up new revenue opportunities from existing and new customers.
The new ideas which have little or no revenue implications have no business relevance. The ultimate acid test for an innovation is its validity from customer’s perspective. History is replete with examples when the inventors could not take their ideas forward into making them a commercial hit. The cases in point include computer and baby diapers. Both IBM and P&G benefited from others’ discoveries and went on to create huge business by innovative marketing practices. New discoveries and ‘finds’ have no use unless these are applied to create something of value for the customers. Business organizations are essentially innovation playgrounds. And the competition between firms is about innovating new ways to making customers life better. This requires unshackling the innovation concept from the narrow by lanes of product and technology centric interpretations.
Consider enormously successful business corporations like Dell, IBM, Apple, McDonalds, Southwest, Federal Express, Starbucks and Rolex. If doing better was the key to business success then we would not have had automobiles rather faster horses. Betterment of an existing product or practice offers leverage but only up to a point. It is much easier to progress in a linear fashion. Clinging on to something familiar is much more comforting than experimenting and creating something new. Doing the right things is more important than doing things right. Since the environment is not a linear extension of past, the discontinuities and disruptions render the old model of incrementalism a risky proposition. Therefore products and services have become better, but better commodities. Betterment provides no guarantee from commoditization.

It is for this reasons a large number of firms fight their battle trapped in incrementalist mindset in most industries. Take for instance computers- box with microprocessors and some circuitry- has high degree of commonality among brands. This is true for many markets. A large number of firms see things as they are and try to make them better but few firms see things which are not there and innovate. Apple’s innovative view of technical machines like the computers and mobile devices has made the company what it is today. The experiential perspective it took to look at computers and mobile instruments has been the crux of innovations at Apple. Nokia on the other hand is beginning to crumble under its own burden for the want of innovative customer centric perspective. Innovations in aesthetics and use experience have created strong contenders like Apple and Samsung for Nokia.
A business organization is collection of activities and decisions. Setting of the routines set in different functions is an organizational necessity but getting frozen in these could be a serious handicap. Innovation opportunities exist everywhere from human resources, to finance, to operations to marketing. A mold shattering perspective is essential to introduce innovativeness. Each function in its own way contributes to organizational effectiveness. The crucial question to ask is: how does it affect our customers? Does it give opportunity for them to upgrade? Does it open acceptability in new customer pockets? Does it make them better use experience? Ultimately the takers of entire organizational acts or decisions are not the people inside rather they are outside. Innovation is about enriching customer experiences and meeting unmet needs with the product or service that a firm markets.
The following marketers had uncanny ability to look at the market and industry unlike others. It is their capacity to go of box of canned perspective and practices led them to do things differently:
Dell: revolutionized the way computers were looked at. It created the concept of ‘fresh’ PC which consumer could configure as against standardized model marketed by others through conventional distribution. Dell shipped directly to consumers from their factory eliminating the middlemen.
Advertising: one of the oldest once that I am reminded of is that of Volkswagen after Second World War. It could connect with prospective customers by lightening the atmosphere for Beetle in campaign with headlines like ‘The Lemon’ and ‘The Bug’. Similar feat was achieved by Pepsi in their campaign ‘Nothing official about it’. Vodafone could beat the clutter by innovative ‘zoo zoo’ promotions.
FedEx: Fred Smith innovation of overnight express service was to change the postage delivery worldwide. FedEx pioneered hub and spoke model to ensure that packets are delivered absolutely by ten the next day. Express delivery service catered to unmet needs of customers and created a new market space.
Southwest: There was land, air and sea transportation. And how air travel industry operated and the market it served, the rules were cast in stone. Airlines sold tickets via agents, did bookings, assigned seating, served meals on board and adhered to schedule. Southwest created the concept of no frill taxi in the air service and went on to become the most successful airline in the world with consistent profit performance in its history.
McDonald’s: known for ‘QSCV’ (quality, service, consistency and value) principle created a revolution of sorts by offering highly consistent burger delivered very fast to customers. It was out of box approach to feeding customers when the out of home food implied dine in restaurants. McDonalds’ challenged the way restaurants operated through a series of innovations which meant that their burgers were assembled not cooked in their outlets. There was a lot of supply chain innovations carried out to create what we know as McDonald’s.
IBM: gradually shifted from hardware business to what is called ‘solutions’ business. Instead of waging a war and fighting heavily by putting computers in the center of their universe they instead put their consumers at the pivot. The out of box perspective to what customer were looking for led IBM to innovatively push the hardware to the fringe of their value constellation. The commodity rut that plagues the hardware business now does not affect IBM for now it has moved up to a higher scale of value ladder.
Cease Fire: this product took very innovative approach to fighting fire by giving potential customers as easy to use fire extinguisher. Unlike big cylinder type hard to use and manual (in case of fire first read the instruction type) driven fire extinguishers this product innovation made firefighting a child’s play. The product innovation-small easy to use spray can- was not a liner extension of the way fire extinguishers were made and marketed.
Toyota: It was not unnatural for a car to breakdown. It is mechanical system and it would. Toyota’s relentless pursuit of innovations at the shop floor and operations revolutionized quality in automobiles and thereby making them trustworthy. The innovations such as JIT, quality circles and poka yoke directly led to products that meet customer needs better.
Apple: the essence of Apple brand is reflected in its symbol (bitten apple). Apple’s out of box approach has been to take ‘brain’ products to a new aesthetic and experiential level after all not all customers are tech geeks. As good medicine has reduced toxic effects, Apple products are about simplification and ease. This is easy to appreciate for users but imagine the difficulty that technology nerd would have form whom complexity gives kicks. Apple’s feat is precisely is achieving this internal transformation where in a technology person thinks like a potential customer.

Business entity is a constant but the environment of which it is a part of is dynamic: competition, customers, technology, economy and pressure groups. The intersection of a constant with dynamic has an upsetting effect. As a result products and organizations are pushed out of the marketing spectrum when customers abandon them. Therefore organization needs to evolve by innovating everything it does. Even areas like human resources and finance have enabling effect on marketing effectiveness. A business organization is what its managers make it to be depending upon their perspective. In order to appreciate innovation imperative the managers need to step out of their cozy chambers and step in customer shoes. It is only then the difference between ‘what we do’ and ‘what you ought to do’ would become clear. Innovation is all about bridging this gap. Consider how iPod liberated people and empowered them in music management; imagine the effect of cold water Tide when it did away with the need to have hot water; think of Surf Excel which gives opportunity for better parenting (‘stains are good’ because these give a child opportunities to ‘grow’); how Gillette freed men from barbers by making shaving a child’s play ‘no skills required’; and think of ‘Ujala’ fabric whitener which took the mess and inconsistency out of the whitening process.

What in your opinion is the most Innovatiive Marketing Company?


2 thoughts on “Business Success by breaking the mold- Innovation

  1. Dear Sir,
    It was very informative & interesting article. In my opinion,APPLE is the most innovative company. From the time immemorial,the company has outperformed it rivals & offered the consumers with better & greater options. Even when the company tops the list of 50 most innovative companies of the world in 2010,it is coming out with products as iphone-4 in future. From gaming to finance to chip-making & to even mobile, it has revolutionized the world of creativity.

    Whereas the competitors like GOOGLE & FACEBOOK are doing well but many times they have failed to feel the pulse of their customers as in case of latest Facebook new chat version which has made it boring & uninteresting as the majority of active internet users said in a recently held poll.

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