Thursday, April 4, 2013

Innovation: Move Ahead, Stay Ahead

INNOVATION: Move Ahead, Stay Ahead
Germin G. Espino

Every industry is defined by a few players who are bold enough to take a different direction and able to define their history and that of their industry's. For them, Innovation is the rule and not the exception. Finding ways to improve present performance is an obsession by every member of the organization. 

Simply put, Innovation is 'doing better'.

There are key characteristics to company with culture of Innovation. They keep challenging the status quo, have a deep and intimate understanding of their customers, and are resolved to make a difference at any cost.

Challenge the status quo. To some organizations, success can be a cause for failure. Being complacent with success eliminates the urge to improve the present condition. "If it ain't broke, don't fix it" is a common mindset for companies who have reached the top of their success, but somehow lost their leadership over some new players with a different view on continuous success. 

Before the advent of personal computing, personal digital assistants and word processing machines, Smith Corona was the industry-leader in the manufacture and supply of typewriters. Smith Corona started all the new technologies in the early 80's and sales grew to over USD 500 million in 1989. They partnered with Acer computers for very short time but later ended the partnership after declaring that typewriters will continue to be a huge worldwide market. Wrong! In mid-90's, Smith Corona declared bankruptcy while Acer became #4 in personal computing manufacturing. Such a big fall-down as a result of being complacent. 

Meanwhile, Acer's founder Stan Shi, the father of Taiwan's technology went on to continue the company's quest for finding new ways to improve technology. Acer is a symbol of how an organization can buck conventional wisdom and succeed. By being critical of the present condition, Acer's culture of continuous process improvement lead to various inventions that are recognized in the world.

Deep and intimate understanding of the customers. The continuous challenge to the status quo must start from an urge to improve the delivery of a service or product to the customer - internal or external. Knowing the basic needs of the customers will give a company, possibly the same basic needs that everyone else can provide. However, companies that lead the industry thrives on giving customers more than what they explicitly wants. These companies provide products and services that customers can't articulate but implicitly need as manifested by behavior, purchasing patter or body language.

A US retail giant and purveyor of membership shopping - Costco, revolutionized shopping by going against conventional method of organizing the supermarket layout. It is a common reason to organize a retail store according to the customers’ perceived order of importance. The logic is to make shopping easier for customers thus making them shop more. Wrong again! Costco knew too well what the customers buy using their POS (Point of Sale) systems. Knowing the 'must-buys' of their customers enabled them to know how to place these items at the far end of the shopping floor. Since these are 'must-buys', customers weave through several aisles of other items and pick up other items along the way. Thus increasing ticket purchase for every shopper. Genius.

Resolve to make a difference at any cost. One of India’s economic giant, who has been in a wide range of industries such as power, airlines, automotive, steel mill and many others, is 117-yer old Tata Group. Tata is a perfect example of an organization with clear focus on innovation.

The company’s pursuit of leading technologies through innovation starts from its Chairman Ratan Tata who believed that innovation must be built-in with the DNA of the organization and not just a company slogan. Thus he mandated all company presidents to be the champions of innovation in their respective operating companies.

Regular Tata Group Innovation Forums (TGIF) which is participated 12 top executives of the whole Tata Group. The objective of the forums is focused on formulating new and different ways to deliver products and services to the consumers. Disruptive thinking is encouraged and even applauded. It is in one of the TGIF’s where the creation of the $ 2,000 Tata Nano car was conceived.

Even regular employees of Tata are mandated to devote 5 of his 45-hour work-week on personal projects that is geared towards discovering innovative products and services. All employees’ performance includes Innovation as a key performance indicator. This culture of innovation contributes to more than 10% of Tata’s annual revenues of over $ 6.0 B.

As companies moves ahead, innovation will be the vehicle by which all of use and cultivate as an organization. Staying ahead will require that the organization adapt a mindset that “we can do better than that”. Any innovation efforts must present how challenging the convention, creative understanding of customers and perseverance can produce brilliant and yet practical ideas. 

With teamwork, creative minds and perseverance, Innovation is a powerful tool to make a company move ahead and stay ahead.

No comments:

Post a Comment