Implementing innovation is easier said than done; my previous posts on obstacles and requirements give an idea of why this is the case. Longtime practitioners of innovation know well that building a company that has a true portfolio of promising innovative ideas to tap into is quite a challenging task. Such a portfolio needs to include initiatives that represent different levels of company risk and return, ranging from what Harvard Business School professor Clayton Christensen calls incremental innovations—tweaks to an existing product or service—to disruptive change/innovations—changes in strategy with the potential to transform markets or business models.
At Cox, we had a history of innovation, but the success of those initiatives were fortuitous and the scale, and long-term outcomes weren’t necessarily a part of a deliberate plan. While it’s nice to benefit from luck, in order to build up the portfolio I previously mentioned, it takes a well-defined process.
Over the years, Cox’s approach to innovation became much more targeted, and we focused on developing a more formal innovation process for the purpose of developing a portfolio of ideas that are integrated with our business strategy and that are possible to implement systematically.
The process we developed started with identifying areas that are ripe for innovation, then carrying ideas through a strategic business analysis, and ending up with executable steps to take. This serves as a vetting process for ideas for how viable they really will be.
Go Beyond the Status Quo
Such a process was/is especially necessary because disruptive change doesn’t come easily at a company like ours, which faces challenges with regard to innovation simply due to our industry and our business profile. Cox is a mid-sized, family-owned, third generation manufacturing company, and it competes primarily in a consolidating commodity market—although stable, this market offers competitors only minimal growth opportunities year over year. Changes in market share within our industry typically arise from either acquisitions or the willingness of one competitor to underprice another to get more business.
Companies like this tend to be fairly risk averse; available resources to invest in innovation are usually limited and are instead directed toward acquiring competitors or some other form of near-term financial win. In this environment, it is sometimes difficult to see how stretching the business beyond the status quo will be beneficial—which can be an obstacle to innovation.
The thing is, all companies need to disrupt the status quo—at some point what you have historically produced/manufactured/sold/etc. will need to change because what’s needed or demanded will shift. The sooner a company faces up to the simple fact that innovation is a requirement for future organic growth, the better off it will be.
Learn more about how to jump-start innovation within your company by visiting my website.