LACK OF INNOVATION - BUSINESS DECLINES!

As a business leader this headline drives me daily. Why?

Well, consider the outcome of:

• Woolworths
• Kodak
• Nokia
• Blockbuster
• Blackberry
• Yahoo

All have either gone bust or are the fraction of the dominance in the market that they used to dominate.

So the lesson here is that it does not matter how BIG or SMALL that you are as a business. If you do not meet the continuing changing needs of customers through innovation, then it is clear that you are likely to go BUST as a business.

So creating a culture of innovation that seeks to ALWAYS solve the ongoing needs of customers and the market, is essential if you want your business to survive.

And be aware, that the pace of change of business and sales decline can be just as fast. Blackberry and Nokia are classic examples of this.

So how can you ensure that your business stays ahead and not fall into the trap of a declining business?

Well the clue is in the graphic below:

As the graph shows. When a new business with exciting products comes into the market place, then there is a period of growth shown by the initial blue portion of the graph.

Once traction and success takes place in the marketplace, then sales continues its upward trajectory and market share is gained. This is represented by the green part of the graph.

But after a while, competitors either get their act together and start taking away customers from you and the business has to react. In most cases that means lowering prices for products or services - shown above in the initial part of the yellow maturity phase.

But one can only drop prices so much. And if a new product or service that is better comes into play (that solves customer needs better, faster and more cost effective), then market share is eroded. And fast, (red phase of the graph)!!

So a few tips on creating an innovative culture that arrests the decline that a lot of companies experience who do not have a clear innovative strategy and culture.

1. Always be clear about the importance of innovation at board level. If there is no focus on innovation at this level, then it is impossible to create a culture throughout the business
2. Be clear about what innovation looks like for the business. Some organisations only focus on product and service redesign. I look at innovation as the culture that seeks to solve customer needs at the product and service level
3. Provide a feedback look through every aspect of the business to understand whether you are understanding customer needs and pains and have systems to solve them in real time
4. Talk to your customers. Find out what their needs are over the next 5 years. By speaking with them on the strategic level will enhance your role as a partner rather than just 'another' supplier
5. Brainstorm the needs of the market internally - use your suppliers in this exercise to understand how the market is changing.
6. Qualify and quantify the business opportunity for creating a new product or service
7. Create development or pilot examples with suppliers and customers to test and validate new ideas
8. And if time is on your side. Consider working with a university to utilise grants such as Innovate UK or look at more specialist developments with research, private contract organisations and even joint developments with suppliers
9. However having a innovation 'can do' culture in the organisation that is focussed on meeting the day to day needs of customers is key

I cannot stress the importance of reviewing on a regular basis the relevancy of your business. Because hubris has a way of blinding the obvious, and many companies have been caught playing catch up by firing CEO's after CEO's expecting the new CEO to change a business that is in material decline.

If you want to know more of how our client have created an innovative culture in the business that has accelerated growth and market share then reach out on the link here.