Here's what I think: If you don't innovate, you may survive today, but will die tomorrow!
Why Innovate?
Here are the top three reasons to innovate today:
1. Differentiate
We already have market leading product or service! There's no need to differentiate. We are selling like hot cakes. We can continue selling our products forever! Really?
Look what happened to the car companies who did not address the rising fuel costs, growing demand of fuel efficient cars, and did not think different? Toyota is an innovator who thought about this a long time before any other car company did, and created the market leading Toyota Prius hybrid car! Not only did the Prius differentiate from the existing cars that Toyota and other companies made, it created a whole new category of affordable mass-produced hybrid auto vehicles, and grew Toyota's worldwide market share and profits. What if Toyota rested on its laurels, and didn't innovate. Someone else would have done what they did, and become the market leader in hybrid autos. On the flip side, some car companies thought that bigger is better! And they kept creating comfortable vehicles that gave very low fuel mileage. Some of these companies went bankrupt. It's great to see GM turnaround though and creating newer, better cars!
2. Out-Compete
We are already competing. And we are winning today! We don't need to do anything different. We just had our best sales quarter. Why innovate?
You may be winning today on your current products, but would you continue to win forever? Your competition is already seeing what you are doing today, and will design equal or better products very soon. And they may sell this for a lower price! Then what? How would you stay ahead?
The only way to stay ahead is to out-compete! You can't out-compete by lowering the price of your products. Many have tried doing this including Dell and HP. Look what is happening to them today in the PC market. Lenovo is grabbing their market by offering similar computers at lower price. And Apple is grabbing their market by offering well-differentiated computers at higher price.
How do you out-compete? By offering better value, better product, better customer service, better experience, better solution! When customers love your product or service, they will come back and buy more!
3. New Markets
We are not growing as fast as before. We are doing OK, but the growth is stalling. We already have good product differentiation, and are doing rather well against the competition. So why is this happening? This could be because you have extracted all you can from your current market place.
It's time to enter new markets! But this should be easy. Right? Today we sell in our local city, tomorrow in our neighbor city, and in a few months all over the state. Next year, we will start selling nationally, and in a few years all over the world. That's a great vision! However, are you ready to enter new markets?
Entering new markets requires operational and distribution innovation. Think Starbucks! They got ahead of themselves few years ago by opening too many stores all over the nation, and essentially could not keep up with the maddening pace. They had to close a number of stores and lay off a lot of people. However, Starbucks is back on track now, is hiring again, and is growing! They are also entering international markets in Asia by learning local customs and creating local partnerships. And they are taking their time to grow. Another company that has done well by entering new markets is Costco.
Check out Google! Is Google resting on the fact that they have the market leading search engine? Google's search engine is a cash cow! Even if they don't do anything else, they can continue making a lot of money for a long time. But Google continues to innovate. Not only do they make their search better each year, but also they introduce new products such as Google+, Google Drive, Google apps, Google Nexus 7 (their latest tablet!) and more. Google is not scared about entering and out-competing in new markets, and creating new revenue streams.
Finally, can anyone can stop Apple? Apple is an innovation juggernaut! Recent Apple innovations including the iTunes, iPhone and iPad have taken Apple over the top, and grown company sales to over $108 billion last year. Apple also has become the most valuable company in the world. Can Apple stop innovating? What will be Apple's new innovation strategy?
One innovation that I have been working 24/7 is oGoing! I am working hard to make oGoing the next social network for small business. I am not there yet, but the journey has sure been exciting and exhausting. When I look at the successes of Facebook and LinkedIn, I do believe that it's possible that oGoing may one day become valuable for small business community.
Download Apple's Innovation Strategy and Learn how Steve Jobs made Apple the #1 Innovative company in the world.