Forbes’ recent article, “Sucker Punch For Innovation,” highlights some points of great concern. The current economic situation is putting tremendous pressure on companies, and it will take quite some time for the fiscal maelstrom to settle down. In the meanwhile, the outlook seems bleak. Capital is drying up, earnings are down, and companies in almost every sector are bracing for lower revenues.
Does this really mean innovation will grind to a halt?
Certainly, there are companies that are tightening their belts. They must do so. Demanding times like these require a return to business fundamentals. Unfortunately, many of these companies will make the mistake of pulling back on innovation. They will do so because they are accidental innovators with no control over their innovation process and thus no possibility to justify their innovation investments because they do not enjoy a strong return on these efforts. These companies will slog through the crisis and with a little luck hold on. However, they will not be positioned to take advantage of the better times ahead.
Returning to business fundamentals begins with delivering a great value proposition. In challenging times, this becomes even more important. Customers need more value if they are going to part with their valuable cash. Companies must provide a compelling value that propels from begin a want to a need in the minds of their customers. Innovation is needed to deliver such a winning and well differentiated value prop.
Returning to business fundamentals requires optimizing the operational efficiency of the enterprise. After decades of leaning down, companies have to look for new approaches to operationalizing efficiency. Finding the best improvement ideas the first time, streamlining the product creation process through diligent vetting, and reducing wasteful missteps are all the purview of innovation best practices. Innovation in operating models is essential in these times.
Returning to business fundamentals demands the organization drive revenues. However traditional channels are underperforming due to economic distress. More of the same is not an adequate response to the today’s market requirements. Companies need to build a better path to their customers and find new constituencies that need what they have to offer. It is time to look at business model innovation to create new sources of revenue.
Of course I could go on, but you get the point. Challenging times require a strong response—the innovation response. Companies that have developed sustainable innovation practices understand this and are not compromising their future by scuttling their innovation programs. They are continuing to invest in innovation because innovation will lead them through the crisis and allow them to thrive.
The leading companies of tomorrow are the ones that are mastering innovation today.