The Secret to Business Success That Many Entrepreneurs Forget
Marketing
is vital, but it won't accomplish much without a system for keeping
your products and services relevant. This expert can show you how.
When
you focus on marketing as single-mindedly as I tend to do, it can be
easy to lose sight of a certain central business truth: No matter how
good your marketing is, you need products and services that are
relevant to what customers want right now. Whether you're a startup
or a company that has been in business for 50 years, failing to
continually keep your offerings current and develop new ones will
inevitably spell failure.
That's
why this week I've brought in the big guns. Mark
Dresdner owns Stratapult
Advisors,
a remarkably successful boutique consulting firm. In a short time,
Mark went from being a management consultant at Accenture to running
the entire revenue strategy for organizations ranging from a billion
dollar aviation company to Starwood Hotels. In other words, this is a
man that knows what it takes to keep a company perpetually ahead of
its competition when it comes to what it is actually selling.
So
without further ado, I bring him to you now.
Where
do companies most often go wrong with innovation?
Mark:
Startups often fall prey to a poor product-market fit that isn't
supported by a solid business model. For one, an innovation's value
proposition--the value offered by a company's product or
service--needs to be desired by customers. While this seems basic, I
have seen many entrepreneurs dive into creating a product that they
think is amazing, only to end up with a solution looking for a
problem. While important, marketing efforts are not the solution
here.
For
a value proposition to be desirable, it needs to address a strong
customer need--functional or emotional. Sometimes customers will not
know they feel a need for something until they experience it, but it
has to be there nevertheless.
Innovative
ideas also need to be viable. The company must have a practical and
cost efficient way to bring a product or service to life. Setting
unrealistic customer expectations can be fatal for startups.
At
the same time, innovations must be financially feasible--likely to
deliver substantial and sustainable financial results. The financial
results are not always needed immediately. Twitter, for example,
survived on investor funds for many years before implementing a
revenue model. However, at some point the startup needs to make money
to survive. Remember, investors will only invest in an unprofitable
startup if they believe that they will eventually earn a return.
What
are some of the innovation challenges faced by companies at different
stages in their lifecycle?
Mark: As
a company matures, it shifts from being the new kid on the block to
the established player. Through the maturing process [leaders] often
refocus efforts from innovation to managing the existing business
better and cheaper. And then, at some point, most mature companies
realize that to grow--and typically survive--they need innovation to
create new revenue streams and address new customer segments. As a
result, the innovation pendulum swings back to more creative and
disruptive ideas.
As
a company's innovation cycle changes, it can struggle to keep its
company story in-sync. Microsoft, for example, is trying desperately
to become more innovative and their rate of new product releases has
increased. However, the company is struggling with their brand
story--much of the market still sees Microsoft as the slow corporate
giant whose innovation pales in comparison to its competitors.
Injecting
innovation back into an established company is challenging. One
approach is to create small pockets of innovation. The other is to
infuse innovation throughout the company. Both can work depending on
the culture of the company.
What
are some ways that innovators can work more effectively with those
who perform other roles in an organization?
Mark:
One of the key roles of leaders of innovation is to build a
collaborative working relationship with all areas of the company. As
innovative ideas mature, those elsewhere in the company are often the
ones to inherit the innovation.
Establishing
a common language around innovation is important. Innovators use the
language of startups, common words are lean startup, design thinking,
and product-market fit. This is usually a foreign language to those
in established companies. Providing learning opportunities, such as
short training sessions and video clips, around the mindset and
language of innovation will enhance communication and understanding.
If
a business unit will be impacted by an innovative change, it is wise
to gain their input from the start. This will not only improve the
quality of the solution but also help make it the business unit's
idea and garner their support. Idea competitions that all employees
can enter are another way to get many people involved and excited
about innovation. The winners of the competition can then be coached
on how to test, improve, and implement their ideas. No matter what
specific approach you choose, innovation is something that needs to
be part of everything your company does if you want to be truly
successful in the 21st century.
BY MICHAEL
SCHEINhttp://www.inc.com/michael-schein/the-secret-to-business-success-that-many-successful-entrepreneurs-forget.html?cid=em01016week01e
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