But not every company takes it seriously. Innovation is what keeps your business relevant as the needs of your customer change, and as your competition evolves.
It’s tempting to believe that in a cost-driven, mature market, efficiency is the key – that close management of costs and efficient and predictable processes are what makes the difference. But this is a mistake.
Of course, efficiency and cost management are part of every company’s operational plan, and in the environment where there’s not a lot of overall market growth, cost overruns can badly hurt a public company through missed operating margin targets. But the real challenge in a mature market is to change the game. Find a new way to deliver value. I’ve written before about how differentiation can be found even in the most mature and commoditized markets. If your market is not growing, or if competitive pressures are eating into pricing and margins, innovation is essential.
Innovation can take place in many areas of your business:
- In the business model
- In the customer relationship
- In the channel
- In your core offerings
- Through solutions and higher levels of value
- Through new approaches to marketing and lead generation
…and in many other aspects of your company. The bottom line is that every business needs innovation, and you neglect it at your peril.