Companies have historically considered the product to be the core of their business. This has been followed by “service as core” and “process as core.” A product-centric company may be something like a mid-20th century General Motors Company. The core of their business was focused on the production of the automobile. Everything within the company was structured to insure that the automobile contained the performance, style, quality, and price that met the customer’s needs.
A service-centric company has a broader perspective in which it may provide a product, but it also sees itself as meeting larger needs of its customers. A service-centric automobile company would not limit its offerings to the automobile, but would expand these to include more of the customer’s needs. An automobile-buying customer requires financing to be able to afford the product and that financing includes a profit margin. Therefore, the late century GM also provided financial services, insurance, title application, license transfer, and any other services that makes it easier for the customer to buy an automobile while also providing additional profits for the company.
A process-centric company may see the customer as a person who has a constant, life-long need for transportation. That person needs to buy an automobile along with the service components. But they also need transportation when the automobile is being repaired. Since repairs can be done at any number of shops, the GM dealer must provide an incentive to bring the customer to the dealership for repairs. One of those incentives is the loaner car and the shuttle service. These insure that the owner of a GM automobile has a transportation solution at all times during the life of the vehicle. It also builds a relationship that is designed to bring the customer right back to the dealer for the next automobile purchase, preferably a lifetime of purchases.
In an innovation-centric company, the goal is to meet the needs of the customer today and those that have yet to be imagined in the future. A company must demonstrate that their innovation moves them from a customer’s current needs to their future needs before the customer gets there. Customers will learn which companies can only satisfy today’s problems and which are already imagining and solving the problems they will have in the future. The innovation-centric company is establishing itself as a lifelong partner. GM’s OnStar system can be cast in this innovation-centric light. As people find themselves more independent and disconnected from each other, they learn that they can no longer count on other motorists to render assistance. Therefore, OnStar is a GM innovation that meets the needs of a large part of the automobile customer-base before the customers realize that they need it. Like cell phones, the item moves from luxury to necessity as customers catch up with the innovation that has already been done by GM.
Companies that are serious about innovation must focus themselves around the needs of the future. They must tie the organization to the source of innovation and structure the company such that they are extracting the maximum value from innovation as quickly as possible.
Jonathan Schwartz, the President of Sun, characterizes his company as innovation-centric: “All we really are is an intellectual-property fountain. Pour money in the top, some of the world’s most talented people go to work, and the intellectual property falls out the other end.”
There may be some debate over whether this is true or not, but the intention is right on target.