Innovation. It’s everywhere and nowhere. For every organization that is innovative we can find countless others who are wandering aimlessly hoping to catch lightning in a bottle. What is innovation? Innovation can be defined as “the process of translating an idea or invention into a good or service that creates value or for which customers will pay”.
Whatever the definition, we know innovation when we see it. The examples are all around us. Innovation is responsible for the luxuries we enjoy today. It is what separates our modern lifestyle from the extremely hard existence humanity endured prior to the Industrial Revolution. Our modern conveniences in life; the automobile, washing machines, electricity, cellphones, computers, airplanes, and yes, indoor plumbing are all products of innovation.
Innovation, and an organization culture which promotes it, is largely responsible for business sustainability with more innovative businesses typically gaining longevity. The nature of innovation and its impact on business is changing however.
Today’s business environment is operating at a pace we have never seen and the same is true with respect to innovation. With the advances in computing technology, algorithms and data we are beginning to see a level of innovation in the information and communication technology industry never before experienced. The implication for business is significant, particularly those businesses in mature industries and markets.
Why you ask? The answer is disruption.
Historically, businesses who initially innovated, captured strong market positions and built sustained revenue and profits were very difficult to unseat. They had the advantage of scale and the resources for continual investment in the improvement of new products and services. As markets mature however, this fuel begins to dissipate making innovation and new business development of greater importance. And in the past, where entry into established markets was more challenging, today’s reality is that most markets are easier to access and ripe for disruption by those bringing new ideas, new technology and new business models.
We have so many examples we can point to today which demonstrate the disruption in today’s market. No business and no industry are safe. Some of the more notable examples include Uber and Lyft who have disrupted the taxi and limousine industry. Air BnB and VRBO have disrupted the hotel industry, Amazon has disrupted almost all retail industry players and the likes of Monster and LinkeIn have virtually eliminated newspaper advertising for open job positions.
For many of the companies disrupted by these innovators one can imagine that they were quite confident in their staying power, particularly given the investments they had made in physical assets. Today however, such investments aren’t enough as unique approaches to business models and service delivery are often preferred by consumers when compared to traditional models.
The nature of today’s innovation raises many questions. How is your business driving innovation? Do you have an organization dedicated to this function? Is new business development a part of corporate culture? Do you use a defined process to ideate and drive new ideas through a formal commercialization process?
For businesses to survive in today’s new paradigm innovation and new business development must become a standard part of corporate culture.
Feel free to share your experiences with innovation and New Business Development. We’d love to hear from you.