Sometimes I feel like innovation is one of those buzzwords people often use as a filler word. It can easily be a word that sounds good, but the meaning is often detached from the use of it. The word innovation has Latin roots. The meaning of the word innovate is about newness and altering the condition of something existing. If you want your company to be innovative, you must be creating new things or making new alterations to existing things. If you have not done anything different in the last few months, you are not being innovative. That being said, innovation quickly expires. For example, it took only months after the death of Steve Jobs before people started questioning if Apple was still innovative. For emerging industries, innovation is not always much of a problem. I believe this because the reason they are emerging is because of innovation itself. It is often companies in mature industries that find difficulty applying innovation to the business. In other words, often emerging industries are born on innovation and mature industries tend to find little room for change or alteration. Mature industries need to put in the extra efforts to innovate.
Don't get me wrong -- all industries, regardless of their stage in the cycle can benefit from innovation. Some industries may have to think out of the box a little more in order to come up with innovative solutions. For example, the automobile industry is a mature industry. There are many competitors in the industry and it has been around for quite some time. Pretty much all cars do the same thing; get people from one place to another. Instead of changing the actual product, companies add new bells and whistles (such as GPS systems). Companies in a mature industry also make small changes to the processes. Cars might not change much, but they may get better mileage, more gadgets and greater safety features over time. Car manufacturers may also improve the car manufacturing process which can increase the margins.
Ok, so you need to do new things right? So... what do you do? Well, before you go over the top and try to give your whole company a makeover all in the name of innovation, let's think it through. Why should you innovate? The answer is simple. If you add 2 and 2 together, you will always get 4, no matter how much you want 5 or how much you support or wish for 5. You have change the arithmetic if you want to change the outcome. So you cannot get any better with the same resources focused on the same things as they were before. Innovation itself is no good unless it makes a positive impact on the company. That means, you need to effectively utilize your historical data and your available resources. This will give you an idea of the general trends. This will help you understand where change (thus innovative thinking) must take place. After all, you want change that has a positive impact on the outcomes of the company.
Redefine the problem
If you want to be innovative, it starts with innovative thinking. Going back to our definition, if your thinking is innovative, you think about the problems in a new way or a different way than you have in the past. A company that is not innovative may think they need to double their recruiting efforts if they want to grow their workforce substantially but maybe they only retain 30 percent of their new employees. An innovative company will break things apart and say, "last time we doubled our recruiting efforts, we did increase our workforce, but we lost a lot of money in training and lack of retention. What can we do differently to improve retention rates, so we can hire less. This is easier said than done. I think most of us would like to think we would do this, but there are so many examples of opportunities out there that large companies have missed out on.
Innovation and vision
Innovation must be attached to vision. The non-innovative company will always want 5 but will never get to five because no matter how hard they try, they always get 4 when they add 2 and 2. The innovative company looks at the 5 and figures out how to get to 5. They already have a 2 and 2, and both are in good shape, they just need another 1. A great example of these two ways of thinking goes back to the days Napster. Once big record companies found out about the illegal downloads done on Napster, they started suing individuals for copywrite infringement. In the meantime, Steve Jobs sees the demand for music downloads from online and iTunes is born. Jobs saw the vision of music downloads and through innovative thinking found a way to create a platform that allowed for a legal and easy to use way for people to download music.
Look for opportunity in everything
When Sony came out with the Betamax, they were taken to court by big film production companies. These production companies were afraid of the capability the Betamax had of recording television. Production companies were afraid their profits would diminish because of this capability. Sony won. While production companies thought there would be a negative effect, it actually helped the industry. Because of this, companies were able to sell video cassettes which created a new market for the industry. If production companies had started by looking at opportunities they could have saved money by not litigating.
If you want an innovative company, you need to recognize that society changes. When I was a kid, I would be running around outside all day with friends. Today, there are many more kids who stay inside and play video games. Several decades ago most of the meals were home cooked. Today, there are a lot more fast food establishments. My point is, if you want to make your company innovative, you need to be able to pay attention to the trends before you have to. Pay attention before your profits start dipping. Look at the simple example of the book industry. Large bookstores that did not adapt to the ebook trends early on are hurting. I am sure the profit pinch didn't happen the moment ebooks came out, but adapting to them too late has hurt many of them. Innovation requires you to think. It is not always an easy thing. Be aware of what you have and what is out there.
Let me know if you have any ideas to improve innovation and good luck staying ahead of the innovation cycle.