The market is changing faster than your organization, and when this happens, your organization is at risk.
Take, for example, the nine biggest companies in 2000: Microsoft, General Electric, NTT DoCoMo, Cisco Systems, Wal-Mart, Intel Corporation, Nippon Telegraph and Telephone, Lucent Technologies, and Deutsche Telekom – on average these organizations have declined 60 per cent in value and the same thing will happen to your company if it doesn't change.
I’ve spent the last 12 years of my life working with businesses of all sizes helping them increase revenue, enter new markets, build partnerships, and become proficient at marketing, sales, and account management. I firmly believed that if I were to do all of those things to the best of my ability and with enough tenacity that we would win.
I was wrong. Without a great product or service, the road to growth is getting far too difficult.
Growing a business is not going getting any easier. In fact, it’s going to get much more difficult with every year that passes. Companies of all sizes are being forced to compete on price – they’re cutting costs as a way to drive profitability, and their piece of the pie is getting smaller as competitors are popping up every day.
Companies need more than marketing, sales, and account management tools and programs to get through those challenges – they need a shift in mindset.
Where are you in the business lifecycle?
In the traditional business lifecycle there are four stages that businesses go through: momentum, growth, cost cutting, and decline.
Momentum is where organizations start as they enter into the marketplace with a new business or offering, but after some time these organizations eventually get the experience, intellectual property, and processes to drive sustainable growth. Sadly, the party ends as competition catches up and the marketplace outgrows your product or service; this is where businesses begin to focus on cost cutting, which will eventually lead to their demise.
Keeping that curve in mind, it’s rather simple what businesses need to do in order to avoid the downward slope of cost cutting and decline – innovate.
By innovating, organizations can effectively avoid decline and can even restart the business lifecycle as they drive new innovations into the marketplace.
The problem with innovation
Innovation, as we know it, is messed up. Typically, innovation is left to one person in an organization whose task is to come up with creative ideas for how they can do something differently. Alternatively, innovation is left to a team of people who sit around brainstorming and writing things on a whiteboard or flipchart when an idea strikes.
The problem with those approaches is there is no repeatable system, insufficient stimulus to help fuel meaningfully unique ideas, a lack of diverse thinking to fuel disruptive or divergent ideas, and a very high likelihood that fear controls the process, which kills all possibility of great innovation.
How can you possibly innovate with such circumstances? The answer is simple – you can’t. Innovation will continue to be just another buzzword in the boardroom unless you are able to approach innovation with a systems mindset that incorporates a diverse group of the organization.
How do I innovate?
All innovation needs to start with the executive team that sets the strategy to maximize alignment between leadership and how employees invest available time and energy.
Once the executive team comes to terms with their needs, interests, constraits and areas for exploration, they can employee their employees to to generate as many ideas as possible that address the overall strategy.
It’s up to the people to generate ideas and innovation, they must communicate who it benefits, the problems it will solve, the specific benefit promise, proof on how it will work, and the price, along with some rough math on the sales potential and costs to develop.
From start to finish this process requires employees to create, communicate, and commercialize their ideas, which will give the executive team a complete view into how their ideas address the needs of the business.
While this process seems complex, with the right amount of stimulus, diversity within the group and by driving out fear anyone can generate innovative ideas.
Eventually every business dies if it stops innovating. Even organizations like McDonald’s Corp., an organization that people believe is too big to fail, eventually begin wasting away. If you look at McDonald’s over a long-term horizon you will see that they are bleeding. They used to have profit margins that were very high – but they are being pulled down to earth as they have not transformed enough.
Their massive infrastructure allows them to maintain and grow through force, but eventually this won’t be enough, as trends in society and their market change. Even the mighty McDonald’s will be forced to innovate or die.
My challenge to you is to start thinking about innovation in the form of new processes, products, or services. If marketing, sales, and account management isn’t achieving the growth you desire, then perhaps the solution isn’t more money and creativity in those areas.
Investing in innovation will help not only improve your organization’s profitability, but also inspire your employees with the possibilities it brings.
Ryan Caligiuri is an associate and innovation engineering practitioner with inVision Business Edge. Caligiuri is also the founder of The Growth Network, a program that provides sales/marketing resources & training to help grow professional services firms. [No available link text]