Innovations Best Kept Secret

Innovations Best Kept Secret

By Mike Myatt, Chief Executive Officer, N2growth

Those of you who frequent this blog know that I’m not a huge fan of either/or propositions. In most, if not all cases, decisions that are made on this basis simply constitute a lack of depth and understanding. This particularly holds true as it applies to the topic of  innovation methodology. Most innovators view innovation from one of two perspectives: those who believe disruptive innovation is superior to incremental innovation, and those who take the opposite side of the argument.  In today’s post I’ll share innovations best kept secret – a different argument altogether.

I want to begin by making the argument for incremental innovation.  It is faster, easier and cheaper to refine something than it is to create it. Let’s face it, not all oceans are blue. Even if you find a blue ocean to sail in, there is a lack of certainty as to whether you’ll navigate it successfully, and even if you do, as to how long you’ll remain the only ship in the ocean. I think most rational people have concluded it is much more profitable to disintermediate a market than it is to build one from scratch.

The main reason attempts at disruptive innovation fail more often, and don’t happen with more frequency and velocity is that human nature is to make things harder than needed by looking in the wrong places for disruptive opportunities. The real trick, the secret sauce if you will, is to focus on incremental innovation that becomes disruptive. Don’t think incremental vs. disruptive – think incremental and disruptive. This is the option that allows innovators to have their cake and eat it too. This is what levels the field by bringing disruptive opportunities in reach of companies that don’t have the time or resources to create new markets.

Let me be as clear as I can – disruptive innovation isn’t limited to a sole focus on creation of something new. Disruption can occur by disintermediating, refining, re-engineering or optimizing a product/service, role/function/practice, category, market, sector, or industry. The most successful companies combine disruptive thinking with incremental approaches in order to manage risk, gain time to market advantages, add value to core initiatives, and to leverage built-in efficiencies and economies of scale.

The problem with most incremental approaches to innovation is that companies don’t think big enough. Most incremental approaches more closely resemble process engineering/automation efforts with a focus on cost reduction through gaining efficiency, not on revenue creation by causing disruption. Removing self-imposed restrictions on thinking will result in opening up more opportunities to innovate around.

The good news is this: there’s an easy fix to this antiquated way of thinking which is currently crippling the innovation efforts of many companies, and it’s found by adhering to the following 6 step process:

  1. Define: The first thing that needs to happen is to define what constitutes disruption. Set a standard and then stick to it. I’m not suggesting that any initiative not meeting the definition by halted, but I am suggesting that you don’t fool yourself and label something as disruptive when it is clearly not.
  2. Identify: Now that you’ve defined what types of projects you’re looking for, aggressively begin pursuing projects that meet the standards.
  3. Assess: Once a potential project has been identified, put it under intense scrutiny and understand what you’re dealing with before you pull the trigger. Based upon the standards that were set in the definition phase create a scoring/ranking system based on key metrics and prioritize initiatives accordingly.
  4. Plan: Be strategic. Great outcomes rarely occur when initiatives are under-resourced and/or poorly led. Deploy your best resources against your greatest opportunities. Make sure you set projects up for success rather than failure.
  5. Implement: Get tactical. The best strategies will end-up facing certain failure unless planning transitions into practice. Without prudent, decisive, consistent and productive forward progress, plans aren’t worth the paper they’re written on. Planning without implementation is an exercise in frivolity.
  6. Monitor: Everything in business, including the best laid plans, are subject to changes in circumstances and market conditions. Put simply, static plans are bad plans. Make sure that all efforts are measured against milestones, benchmarks, deadlines, budgets, etc. If the plan needs to be nuanced in order to achieve success, then have the flexibility engineered into your plan to allow for such changes.

As always, I welcome your thoughts and opinions in the comments section below…

Disruptive Business Models

By Mike Myatt, Chief Strategy Officer, N2growth

Disruptive Business ModelsHow disruptive is your business model? While much has been written about corporate vision, mission, process, leadership, strategy, branding and a variety of other business practices, it is the engineering of these practices to be disruptive that maximizes opportunities. Without a disruptive focus you are merely building your business model on a “me too” platform of mediocrity. Few things are more critical to your efforts in increasing your revenue growth and corporate sustainability than understanding the value of disruptive innovation. So, in today’s post I’ll examine the power of disruption as a key business driver…

Disruptive business models focus on creating, disintermediating, refining, reengineering or optimizing a product/service, role/function/practice, category, market, sector, or industry. The most successful companies incorporate disruptive thinking into all of their business and management practices to gain distinctive competitive value propositions. “Me Too” companies fight to eek out market share in an attempt to survive, while disruptive companies become category dominant brands insuring sustainability.

So why do so many established and often well managed companies struggle with disruptive innovation? Many times it is simply because companies have been doing the same things, in the same ways, and for the same reasons for so long, that they struggle with the concept of change. My engagements with CEOs often focus on helping them to embrace change through disruptive innovation. As a CEO, I would strongly suggest you conduct a gut check during your next executive meeting by counting the number of times you hear your CXOs say things like: “That will never work,” “We can’t do that,” “That’s not my problem,” “We’ve always done it that way.” or my personal favorite, “We need to focus on our core business.” Don’t allow your enterprise to adopt an attitude of complacency, because the simple truth is that complacency kills companies. 

There are examples of companies throughout history and across every sector that have either failed to embrace disruptive business models, or have failed to maintain their once disruptive edge. Let’s just take a moment and look at a few notable examples of what happens to companies that become complacent…Why didn’t the railroads innovate? Why didn’t Folgers recognize the retail consumer demand for coffee and develop a Starbucks type business model? Why didn’t IBM see Dell coming? How did Microsoft not keep Google at bay? Why did American auto-makers lose their once dominant position to their European and Asian counterparts? How did the brick and mortar book stores let Amazon get the jump on them? I could go on-and-on with more examples, but the answer to these questions are quite simple…The established companies become focused on making incremental gains through process improvements and were satisfied with their business models and didn’t even see the innovators coming until it was too late. Their focus shifted from managing opportunities to managing risk, which in turn allowed them to manage themselves into brand decline…

At one end of the spectrum take a look at the companies receiving investment from venture capital and private equity firms, and on the other end of the spectrum observe virtually any category dominant brand and you’ll find companies with a disruptive focus putting the proverbial squeeze on the “me too” firms occupying space in the middle of the spectrum. With the continued rapid development of technology taking the concept of globalization and turning it into hard reality facing businesses of all sizes, it is time for executives and entrepreneurs to examine their current business models from a disruptive perspective. Ask yourself the following questions:

  1. Why should anyone be led by you?  
  2. When was the last time your business embraced change and did something innovative?
  3. When was the last time you rolled-out a new product?
  4. Are your management and executive ranks void of youth?
  5. Do people in your organization laugh at new ideas?
  6. When was the last time you entered a new market?
  7. Are any of your executives thought leaders?
  8. When was the last time you sought out a strategic partner to exploit a market opportunity?
  9. Does your organization focus more on process than success?
  10. Are employees who point out problems looked down upon?
  11. Do you settle for just managing your employees or do you inspire them to become innovators?
  12. Has your business embraced social media?
  13. When was the last time your executive team brought in some new blood by recruiting a rock star?
  14. Does anyone on your executive team have a coach or mentor?
  15. Has anyone on your executive team attended a conference on strategy, innovation or disruption in the last year?

If you’re an executive or entrepreneur and you can’t put forth solid answers to the majority of the questions referenced above, then your company is likely a market lagger as opposed to a market leader. If you continue to do the same things that you have always done in today’s current market environment you will see your market share erode, your brand go into decline, your talent and customers jump ship, and your potential never be realized.

Albert Einstein said it best when he noted “the definition of insanity is doing the same thing over and over again and expecting a different result each time.” Bottom line…don’t be the CEO who causes your management team to continually say “the boss won’t go for that one.” If you lead from the front by inspiring change, innovation, and disruption your business will surely prosper.

Is your business focused on disruptive innovation? If not, why not? I’d be interested in your comments…

Innovate or Perish

By Mike Myatt, Chief Strategy Officer, N2growth 

Innovate or PerishInnovate or Perish is a battle cry that I have long espoused to my clients. I can’t think of a better example of what can happen to those companies that fail to innovate than the rumors circulating about the Tribune Co. The Tribune Co., owner of the Chicago Tribune, Los Angeles Times, and other once revered trophy brands is hemorrhaging under the burden of huge debt obligations, insufficient cash flow, and is rumored to be filing for bankruptcy as early as this week. The emergence of better alternative news sources has been hurting the newspaper industry for years now, but when you combine the rapid emergence of new media options with the crushing blow of the recession, it may just be too much for an old media lagger to survive…

When was the last time you actually read a print version of a newspaper? Unless I have a few minutes to kill in an airport or a lobby somewhere I’ll never touch a newspaper. By the time you read something in the newspaper it’s simply old news…If you rely upon the newspaper to keep you informed, here’s a hint…you’re out of touch. However the bigger issue here is not how you choose to receive your media, but rather out of touch company leadership that doesn’t understand the importance of innovation as it relates to corporate sustainability. 

If you’re a CEO reading this post ask yourself this question: How disruptive is your business model? Without a focus on disruptive innovation you are merely building your business model on a “me too” platform of mediocrity. Disruptive business models focus on creating, disintermediating, refining, reengineering or optimizing a product/service, role/function/practice, category, market, sector, or industry.

The most successful companies incorporate disruptive thinking into all of their business and management practices to gain distinctive competitive value propositions. “Me Too” companies fight to eek out market share in an attempt to survive while disruptive companies become category dominant brands insuring sustainability. So why do so many established and often well managed companies struggle with disruptive innovation? Many times it is simply because companies have been doing the same things, in the same ways, and for the same reasons for so long that they struggle with the concept of change.

As a CEO Coach many of my engagements with chief executives focus on helping them to embrace change through disruptive innovation. Why didn’t the railroads innovate? Why didn’t Folgers recognize the retail consumer demand for coffee and develop a “Starbucks” type business model? Why didn’t IBM see Dell and Gateway coming? Why have American auto-makers been relegated to inferior brands when contrasted to their European and Asian counterparts? How did the brick and mortar book stores let Amazon get the jump on them? I could go on-and-on with more examples, but the answer to these questions are quite simple…The established companies become focused on making incremental gains through process improvements and were satisfied with their business models and didn’t even see the innovators coming until it was too late. Their focus shifted from managing opportunities to managing risk, which in turn allowed them to manage themselves into brand decline…

At one end of the spectrum take a look at the companies receiving investment from venture capital and private equity firms, and on the other end of the spectrum observe virtually any category dominant brand and you’ll find companies with a disruptive focus putting the proverbial squeeze on the “me too” firms occupying space in the middle of the spectrum. With the continued rapid development of technology taking the concept of globalization and turning it into hard reality facing businesses of all sizes, it is time for executives and entrepreneurs to examine their current business models from a disruptive perspective. Ask yourself the following questions:

  1. When was the last time your business embraced change and did something innovative?
  2. When was the last time you rolled-out a new product?
  3. When was the last time you entered a new market?
  4. Are any of your executives thought leaders?
  5. When was the last time you sought out a strategic partner to exploit a market opportunity?
  6. Do you settle for just managing your employees or do you inspire them to become innovators?
  7. Has your business embraced social media?
  8. When was the last time your executive team brought in some new blood by recruiting a rock star?
  9. Does anyone on your executive team have a coach or mentor?
  10. Has anyone on your executive team attended a conference on strategy, innovation or disruption in the last year?

If you’re an executive or entrepreneur and you can’t answer yes to the majority of the questions above then your company is likely a market lagger as opposed to a market leader. If you continue to do the same things that you have always done in today’s current market environment you will see your market share erode, your brand go into decline, your talent and customers jump ship, and your potential never be realized. Remember the definition of insanity is continuing to do the same things while expecting different results. Bottom line…change, innovate, disrupt and prosper.