Move or Lose: Leave Your Comfort Zone to Innovate and Grow
Few companies will be the next Google, Amazon, or Apple—companies that successfully change the rules of the game. But any company can embrace a culture of innovation to move ahead of the competition in its own industry. Done well, a culture of innovation enables a company to turn new ideas into sizable returns.
So where does that innovation come from and how can you foster it at your company? It comes when you consciously encourage open-mindedness and experimentation, when you actively embrace new ideas and explore their limits. It comes when you support a corporate ethos that says it’s OK to fail quickly, fail often, and fail uniquely. Because organizations that never fail are, by definition, organizations that never truly attempt to innovative.
The innovation mindset is one that’s always open to new and different ways to do business—new ways to sell, manufacture, market, or build a supply chain. You can’t do any of that by conducting business as usual. For the most part, business as usual involves processes that do not add uniqueness or value to your organization.
For example, the ability to reconcile bank statements. Yes, this is good thing to know how to do properly. But it’s largely a commodity. It won’t win you any new business. It’s the sort of process that dwells at the bottom layer of the value creation chain—the layer that is all about saving money by spending less on commoditized processes. Again, these processes are important. But organizations don’t prosper if they primarily focus on spending less. You can’t save your way to success. Instead, you need to figure out how to automate those bottom layer processes as much as possible so you can focus your energy higher up the chain.
The middle layer of the value creation chain consists of those processes that help you do business well. Maybe it’s the way you engage with customers or how you work with suppliers. You want to develop a robust set of systems and controls around these processes so you can deliver them consistently and effectively.
This middle layer enables you to make money, but it won’t help you make new money. That requires innovation. This is the top layer of the value creation chain: processes that create new revenue. The winners going forward will be the companies that consistently find those processes—and innovation is how they’ll do it.
Every company now must ask itself what it is and what it can do to create new business. Take Sears. By no means is this company an equal of Apple or Google in terms of innovation. In fact, many think Sears should be dead by now. But it does innovate. Not long ago, Sears created a real estate investment trust, Seritage Growth Properties, to extract money from its massive real estate holdings. And today, Seritage is actually in a position to profit as Sears itself declines.
So where do you start? One of the most effective ways to innovate is to use data. Organizations that are better able to aggregate and analyze data are in a better position to make good business decisions and produce value faster than others. That’s because they have the vision to spot opportunities that others simply can’t see. By getting deep into their data, organizations can uncover important business trends, drive new efficiencies, improve processes, and ultimately innovate.
This is not easy, of course. The challenge is to turn raw data into actionable information that can drive accurate decision-making. The disruptor will be the capability to analyze data through more powerful analytics, machine learning, and artificial intelligence applications. This will give corporate decision makers the power to shift from planned and preventive maintenance to prediction and competitive advantage.
Savvy organizations are not sitting still. They’re embracing innovation as the central strategy to drive change and growth. They understand that gaining or losing market share in the years ahead will depend on how well they
can innovate to meet and beat the ever-changing market.
A culture of innovation is the key to growth in today’s fast-moving business environment. Innovation can help organizations not just save money or make more money. It can help them make new money―critical to any growth strategy.
This has been prepared for information purposes and general guidance only and does not constitute professional advice. You should not act upon the information contained in this publication without obtaining specific professional advice. No representation or warranty (express or implied) is made as to the accuracy or completeness of the information contained in this publication, and CohnReznick LLP, its members, employees and agents accept no liability, and disclaim all responsibility, for the consequences of you or anyone else acting, or refraining to act, in reliance on the information contained in this publication or for any decision based on it.