In the Gerber example referenced at the beginning of the article by
Maxwell Wessel, the effort to innovate fell flat because they maintained a
focus on operational efficiency which is typical for companies with more mature
products. One point that Wessel makes is
that just because an idea makes sense operationally and financially, it does
not necessarily mean it will result in a success.
I feel that an important takeaway here is that no matter how large or
well established the company is and their existing products or services are,
they have to somewhat go back to the beginning in order to innovate
effectively. It’s absolutely critical
that the proposed product or service clearly identifies a problem in the market
and matches it to a solution. Without
this alignment, there is little hope for success. To take that even further Wessel describes
the fact that venture capitalists are looking for interesting solutions, not
just run of the mill.
As a consumer myself, I couldn’t
agree more. When I look at purchasing
products that are new to me, I can honestly say that it comes down to more than
just pure feature or functionality. I’m always
looking for that next thing that will make me feel good about the product as
well as what it can do for me. With
mature organizations, the focus tends to be around profit and increasing the
bottom line than it is reaching out and validating with the market. This is in contrast to start-ups that spend a
significant amount of upfront time identifying, testing, and validating.
In order for this philosophy to work and for a company to reap the
benefits, the organization has to allow for some existing groups to function differently
or to put new groups in place in alignment with the revised goals. As companies mature, this type of shift is
extremely difficult to undertake when the culture has not been formed to think
that way. I have found this within the
company I work for where the lack of alignment between different groups
restricted the ability to innovate. This
was a case where the company may have seen much better results from their
initiative if they had enlisted different staff rather than the same people
that had been working on the mature product and had developed a certain culture
as a result.
Another example given in the follow-up segments to the article was with
Xerox. This example points to failure on
Xerox’s part as a result of poor commercializing. Very similar to how Gerber tried to limit
risks and reduce cost by operating the same way with a new product, Xerox
attempted to reuse their existing salesforce in order to push out their new
(and very different) product. I’ve
witnessed some tremendous improvement in my own company as a result of better
alignment with our customers and their industry. With a dedicated approach and techniques
designed for that given market/customer, we have strengthened relationships and
instilled confidence in our customers that we are striving to meet their needs
rather than just making a profit.
Lastly, I found another article that discusses innovation among large corporations
based out of work from MIT (http://miter.mit.edu/article/driving-innovation-large-corporations-i-challenges-faced-large-corporations). The article discusses the challenges that
large companies face in trying to be more innovative. In particular, the idea that there is a fear
of cannibalization resonated with me. I
think this is a good point that wasn’t explicitly called out in the other
article. This is a dangerous aspect of
releasing new products that is discussed a lot in my business. However, the underlying factor in this
conversation still goes back to understanding your customer and knowing what
that issue is we are trying to solve.
Without that understanding, companies run the risk of dealing with
customers that don’t see the value and are not willing to pay for something
they can’t justify.
