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Will Innovation Save You?

Innovation is something that is sought after by many firms. They want to be the industry leaders in their field, take the profits, and became household brand names. But so few businesses ever make it happen. Why is this? And what can your company do about it?

Companies that are capable of innovation tend to be few and far between. Not only do they have to have the right ideas and skills, but they also need the drive to make it happen. Many ideas sit on the test bench at major companies, and aren’t pursued for one reason or another, despite the enormous potential payoffs.

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Perhaps the best example in history of this sort of thing is Kodak. Back in the 1970s, Kodak actually invented the object that would later destroy them – the digital camera. But the company executives argued that digital cameras would never take off because of their large size. Nobody would want to carry around an object that was the size of your average inkjet printer. It was a ridiculous idea. But what the company didn’t realise was that their digital camera technology would soon be refined. Digital cameras would get smaller, batteries would shrink in size, and before long, practically everybody would own one.

By the late 1990s, Kodak was in trouble. The industry had moved ahead and innovated, but Kodak was stuck in the doldrums, trying to sell a technology that people no longer wanted. Before long, the company folded, with the loss of tens of thousands of jobs.

Kodak represents a company which had ideas but which failed to execute or see the marketing potential. It’s a warning to other companies what happens when you take your eye off the ball and get complacent. What Kodak shows that if you are going to innovate, you’ve either got to go big or go home. Companies that underestimate the disruptive nature of innovative change often end up falling victim to their own success and fail to put in place the systems they need for maximum impact.

So what should your company do to get better at innovation? And what’s standing in your way?

Prepare For A Lot Of Failures

People don’t get good at things by constantly succeeding at them. Instead, they get good by failing and learning from their mistakes. For companies, it’s exactly the same. Jeff Bezos, the CEO of Amazon, says that his business makes mistakes all the time. Some of their ideas, he says, have been embarrassing and failed to make any impact on the market at all. Others seemed like a good idea, like the Fire Pro, but never achieved that breakout moment those working on the project had hoped for.

What’s interesting about Bezos, however, is that he is happy to talk about failure. He recognises that failure is a necessary hurdle on the road to success – and one that might take multiple attempts to jump. Failure, he says, also fuels new innovations. Many startups fail, he says because they are intolerant of failure and won’t let bad ideas go. They keep trying the same things over and over, without any real success.

Take On Financial Risk

Innovation often requires taking on an enormous amount of financial risk. But many entrepreneurs are unwilling to take out director loans to ensure their success. In other words, they’re reluctant to commit to a project and instead opt for something less costly. The problem with this approach, according to Steven Huyan of the Tandon School of Engineering, is that the result is usually something half-baked. It’s kind of what consumers want, but not exactly, and that can lead to disillusionment.

Perhaps the most obvious place this happens is in the world of startup software companies. They promise their customers, be it businesses or gamers that they’re going to create a truly groundbreaking product, but it soon emerges that it’s nothing of the sort. Despite the fact that the team has all the skills it needs, financial and time constraints mean that the finished product is lacklustre.

Ideas Require Both Speed And Delivery

Startups fail fast, and they fail cheap. And while this might sound like a bad thing, it’s actually a good way of figuring out whether you’re wasting your time or not. There’s nothing worse than dedicating years of your life to a project, only to find out years later that the idea simply won’t fly. Failing fast – if failure is necessary – is the best way.

The other benefit to this outlook is that it forces you to get a product to market quickly. A product that sits on the test bench for years does nothing but gather dust. You need feedback from consumers as quickly as possible in order to work out whether you’ve got a viable product. Ideas, says Kuyan, aren’t enough in the world of business, however cutting edge they might be.

Often startup companies believe that they’re going to have more success than they do because of how their businesses start. Usually, they already have already built up a rich network of professionals in their industry, many of whom have indicated their interest in buying the product. They then base their planning on these sales, rather than likely sales originating from the rest of the market. The result is a dramatic overestimation of demand. Startups, therefore, need to focus on their sales pipeline so that they constantly have a stream of new inbound customers once they start selling to the wider market.

Innovation Needs To Be Unique, But In A Way That Matters

Finally, if you’re a small company, you have to be able to make something that the big companies can’t imitate and low cost. Usually, this means having a product that is sufficiently differentiated to be patentable.

There are dozens of example of companies that have launched a unique product in a way that matters. Freemie, for instance, has released a mobile breast milk pump that mothers can watch in use.

Ultimately, innovation isn’t about marketing. It’s about delivering something new and valuable to customers.

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