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Innovate or Die is a series that focuses on inspiring entrepreneurs through generating ideas to create new markets, products or services.

Despite the many differences that seem to separate them, small businesses can learn a lot from large companies like Lululemon Athletica. In today’s case, we consider the importance of exploring new markets to maintain steady, thriving growth.

When the New Year rang in, I read column after column proclaiming the beginning of the end for Lululemon. Some writers even prophecized Lululemon as one of the top companies that would disappear in 2015.

Could I blame these columnists for making such commentary on the decline that seemed imminent? No. With a slew of quality control issues hurting the brand, an upsurge of competitors snatching up market share, multiple marketing blunders, a plummeting stock and now the notorious owner – Chip Wilson – stepping down, things for this yoga-focused retailer aren’t exactly looking good.

But while those pundits raise some good points, I have a different perspective. In fact, I would go as far to say that Lululemon is embarking on a new journey that will bring about good fortunes for the company.

The Lululemon Athletica shop located on Queen St. West in downtown Toronto (Fred Lum for The Globe and Mail)

Are they innovating or dying?

On the business lifecycle, I would put Lululemon near the top of the growth curve as they approach the peak.

While the Vancouver, B.C.-based company has taken a lot of heat in the media and hit a stumbling block, it is still well-positioned for further growth if they continue to expand into new markets with new products. By doing so, it goes from being just another provider of yoga wear to providing products that, as their mission statement articulates, create components for people to live longer, healthier, fun lives.

Upon closer examination, there is evidence that Lululemon is indeed living up to its vision. Take for example Lab Night Tight, technical yet fashionable tights. This is an excellent product for a number of reasons.

First, after conducting a little insight mining – where customer habits, practices, and perceptions are used to spark ideas – you find that sales of denim jeans are down 6 per cent year over year, and those declines could get steeper as companies like Lululemon continue to bring stylish, trendy new products to market. And secondly, after conducting a market test they found the initial response products like the Lab Night Tight was overwhelmingly positive.

What’s more important is as the company develops new designs and bring new products to market, it will also file new patents for these innovations. Filing patents can be a leading indicator for innovation – where sales revenue is a lagging indicator. If there are a lot of new patents in the pipeline, that’s a great sign that they are looking at product innovation.

As with any organization, there is a constant need to create meaningfully unique ideas that will generate that next new wave of growth. The Lab Night Tight is a great product and an essential core innovation that will drive steady demand. However, it’s not enough to propel the organization’s next wave of growth. To do that, it will need to focus on leap innovation.

The Lab Light Tight garment was designed by Lululemon Lab – an incubator for progressive ideas and design in Vancouver, B.C. Source: Lululemon Athletica

Using Po to drive leap innovation

For the sake of learning, let’s say Lululemon’s executive team wanted to stay true to its mission statement and explore new ideas to help their customers live longer, healthier lives.

So to stretch the mind and drive new ideas, we would use a tool called Po.

Po is a provocation; a statement that ignites thinking in new directions. When the group responsible for innovation is stuck in a rigid thinking mindset, it may be time to shake things up and use Po. This exercise allows the group to let go of where they are and explore new patterns – even if their value is not immediately obvious.

Po forces you to think differently. In this case, let’s begin by eliminating something you take for granted – clothes. So what if Lululemon was not permitted to make clothes anymore?

From there, you would mind map all of the ideas you can come up with, using that stimulus. So if Lululemon was not allowed to make clothes, they could make supplements, shoes, yoga studios, technology and so on. We then pick something to go deeper into, in this case, we’ll explore technology.

The inside of the Lululemon Lab and store in Vancouver, B.C. (John Hayward for The Canadian Press)

What kind of technology currently exists that helps people get healthier and live longer? There is wearable technology like the Fitbit or Jawbone UP24 but there is also technology like the Accu-Chek Aviva blood glucose meter that helps people who have diabetes or hypoglycemia live longer healthier lives.

What if Lululemon created a leap innovation called LuluLife – the first ever device that helps you live longer. Customers for the LuluLife invest in their health by buying supplements, gym memberships or health foods but don’t have the ability to know what they need to add or remove from their diet or routine to achieve optimal health.

LuluLife provides such accurate data on your biochemistry that you will never be surprised by blood test in your doctor’s office because you will know exactly what is happening with your body. It’s a health-optimization device, operated by the owner, who will take a very small sample of their own blood and LuluLife not only analyzes blood glucose levels, but also the lipoprotein panel, complete blood count, and more. The data is then uploaded to an application that gives detailed analysis on the state of your biochemistry such as blood cell count, cholesterol level, and vitamin deficiency.

A woman carries a shopping bag with the Lululemon Athletica Inc logo outside one of the company's stores in New York. (Lucas Jackson for Reuters)

The insight provided by Lululife will help customers live longer, healthier lives. This is just one idea out of many that can be generated using Po.

Whether Lululemon continues to focus on clothing for years to come or decides to explore leap innovations, one thing’s for sure, faced with the decision to innovate or die, Lululemon clearly chooses to innovate.

Ryan Caligiuri is an associate and innovation engineering practitioner with inVision Edge – an innovation and growth company. inVision Edge is also the leader of the Canadian Innovation Engineering Network.

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