Most businesses that fail, are failing for one reason the: the inability to innovate. There are 3 types of businesses: An Explosive Growth Business, A Stagnant Swamp Business, or A Matter of Time Business. The business quote by Peter Drucker, “Business has only two functions – marketing and innovation” is one of the most important business quotes of all time. Innovation comes before marketing, because without innovation you have nothing to market. To give a little more background here are the descriptions of the 3 types of businesses that exist.
A Matter of Time Business – is defined by a business that may or may not be profitable, but does nothing to innovate or believes in innovations that don’t matter to the consumers. This business type is out of touch with its consumers. It really is just a matter of time, before this business closes its doors. But this business type can always decide to change course, they can go from a Matter of Time business to an Explosive Growth Business in a very short time.
Stagnant Swamp Business – is defined by a business that may or may not be profitable, but does nothing to set itself a part from the competition. Most businesses fall into this category. These businesses are usually moderately happy with the incomes they achieve, but feel that they could or should have more business. Surprisingly both very small businesses and large fortune 500 companies fall into this Stagnant Swap category. This type of business is also just one good idea away from being an explosive growth business.
Explosive Growth Business – is defined by a business that may or may not be profitable, but has at least one thing that it does that makes it the industry innovator. These businesses sometimes aren’t profitable because they are experiencing growing pains due to rapid growth. This sometimes can cause a problem, but it is easily remedied with the proper employer/employee team. These businesses are often the businesses that are constantly adding new staff and testing a lot of products.
Where does your business fit? If you don’t know you are either A Stagnant Swap or A Matter of Time.
So Who Needs Innovation, Anyway?
Every single business… Let me say that again… Every single business with absolutely no exceptions. Businesses need innovation like humans need air. Innovation is not optional. Every business who wants to achieve success needs innovation, without innovation you are just taking up space and not perfecting your craft. If you are going to own or work in a business you need to do it to your full potential and that full potential includes innovation and lots of it.
What is Innovation?
The classic definitions of innovation include:
- the introduction of something new.
- a new idea, method or device.
- the successful exploitation of new ideas
- change that creates a new dimension of performance (Peter Drucker definition)
Something new – must be substantially different, not an insignificant change. In economics the change must increase value, customer value. Innovations are intended to make someone better off. The term innovation may refer to both radical and incremental changes to products, processes or services. The often unspoken goal of innovation is to solve a problem.
What is the most innovative product of all time? When you think of innovation what comes to mind? A light bulb, right? So is a new fluorescent energy saving light bulb innovative?
If you could create gum that tasted great, and had flavor that lasted as long as you chewed it, could you sell a bunch of gum? Could you charge twice as much as your competition? So what in your business could be gum that lasts forever?
Innovation and Marketing
With a mom and pop type business, they are usually too busy trying to keep their heads above water to innovate and move forward. Large companies are usually out of touch with the end consumer. Companies should have an innovation department, before a marketing department. Your marketing department, CAN NOT be your innovation department. The innovation department should include at least equal representation from all levels of your organization, if not weight heavier with those closest to the consumer. Innovation should be based heavily on consumer input and performing the impossible.
Before you place an ad, you need to know what your message is. Your message is based solely on your company’s ability and willingness to innovate.
Innovation starts with analysis. You first need to develop a team. If you are a one man show, it won’t take long to assemble your team. If your company is bigger, it will take longer. Remember, Innovation is not an option… It is a necessity!