It’s Critical for EVERY Company to Keep on Innovating

16 Mar

What are the two major goals of many companies? To grow sales and to grow profit. And while most companies say that being innovative is also a key goal, do they really mean it? The typical company tends to spend two percent or less of revenues on research and development. And the great majority of “new” products are usually simple line extensions or new models. At a large number of companies, innovation may not be dead — but it is certainly in a deep slumber.

With this in mind, let’s take a look at a terrific article called “Why Companies Stop Innovating” by Steve Blank for Inc. According to Blank:

“There’s been lots written about how companies need to be more innovative, but very little on what stops them from doing so. Companies looking to be innovative face a conundrum: Every policy and procedure that makes them efficient execution machines stifles innovation.”

“Facing continuous disruption from globalization, China, the Internet, the diminished power of brands, and the changing workforce, existing enterprises are establishing corporate innovation groups. These groups are adapting or adopting the practices of startups and accelerators — disruption and innovation rather than direct competition, customer development versus more product features, agility and speed versus lowest cost.”

“But paradoxically, in spite of their seemingly endless resources, innovation inside of an existing company is much harder than inside a startup. For most companies it feels like innovation can only happen by exception and heroic efforts, not by design. The question is: Why?”

Click below to see Blank’s detailed answers to this question.

 

 

7 Responses to “It’s Critical for EVERY Company to Keep on Innovating”

  1. Christopher Barnes March 16, 2014 at 4:27 pm #

    Companies certainly do need to innovate in order to stay competitive and profitable in the long run. For example, Google the rise and fall of Eastman Kodak. Companies can never stop innovating; otherwise newer firms will take over. Obviously it is easier to be innovative in a smaller start-up: you are trying to make a name for the company. In an established firm, however, there are much more rules and prerequisites to be met. Management may not want to be innovative because they become complacent when they already have success.

  2. Edward Farquharson March 17, 2014 at 11:43 am #

    It seems many companies innovate when their competitors due. It’s often reactive instead of proactive. Companies that don’t innovate become obsolete. However, change is difficult when you are set in your ways for so long. Many companies have this issue, which leads to them being replaced or bought out by other companies. As times change, companies can’t help but undergo a corporate evolution.

  3. HuDie-MKT249 March 17, 2014 at 4:41 pm #

    It is necessary to innovate to keeping forward and survivor under the stiff competition, However, innovation doesn’t have to be totally new that it always based on some old version or models by adding new features, functions, attribute and more to catch up the advance of technology and consumers’ increasingly needs. Also,globalization is a ever big challenge for innovate companies to maintain their advantage with the large number of copy and Imitation from start-up companies and developing countries.

  4. Sarah Carpenter March 21, 2014 at 1:45 pm #

    I understand that innovation is key, but sometimes it seems like too much forward-thinking can scare people off. For example, we could compare Apple and Microsoft. I have a family friend who works and the Microsoft campus in Seattle. When I visited, he showed me some seriously amazing technologies that Microsoft has. These innovations,as cool as they were to play with, are slightly complicated and apparently haven’t been selling in the market. Apple often performs better financially because of the ease and simplicity of their products. A company has to make sure they balance the ability they have to make cool products with what the customer will actually buy. Going too innovative can be equally as troublesome as not innovating at all.

  5. Abhishek Jha March 21, 2014 at 10:20 pm #

    While innovation is key, many companies also like to stick to the age-old proven tactic of “if it ain’t broke, don’t fix it”. We all know that there are only a few who bring about a true change. Most companies are not ‘naturally’ good at or capable of great innovation, so they tend to refrain from it while at the same time count on others to innovate while being open to adapt to the innovation once it occurs. This also saves them from suffering losses from failed researches/innovation. These are some reasons I believe for companies to not be innovating. But yes, it would be quite a different world if most companies heavily invested in R&D.

  6. theroyalbengalitiger March 24, 2014 at 1:38 pm #

    I think Michael E Porter does an excellent job of explaining this in his seminal article “What is Strategy”.

    Without innovation, companies cannot differentiate themselves from the competition so no matter what extraordinary level the organization efficiency is at, it is no substitute to innovation.

  7. Glorya Henley May 10, 2014 at 4:47 pm #

    I agree with this article and the fact that although innovation may not be dead at many companies, they believe they are doing enough to stay current. Doing just enough will not keep companies ahead and the business may not be ready when other brands come into the market and try to take over. Most companies don’t want to take too much risk, and if they have been growing and making profits why change. In most vertically structured larger companies, all of the rules, policies and procedures take precedent if innovation can possibly get in the way.

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