Innovation under the Microscope
Business leaders are often awash in trendy ideas as concepts come in and out of focus, regularly. Prominent ones, like innovation though, persist and become powerful organizers for how leaders and advisors believe companies should operateto grow and or build value.
Innovation is held in high regard for good reason: Its stellar track record.Along with leadership and technology, innovation resulting in new products and services has fueled early organic and later transformational growth of such luminaries as Google and IBM.
So we know innovation is good for start-ups and much bigger concerns, but how does it actually work in established smaller middle market companies? Is there a framework to use with clients looking to innovate their companies?
An Important Distinction
Innovation and invention complement each other but they are different. Invention refers to major technological breakthroughs, like the transistor, that may provide a platform for subsequent innovations in areas like telephony and telecommunications.
Innovation is more focused on addressing and solving tangible real world concerns, also more collaborative. Simply defined, innovations create solutions from extant parts and pieces. It may not be the rocket science of invention, but nonetheless requires creativity and results in novelty.
Different Ways to Innovate
We tend to associate new products or services with innovation. But hewing close to the definition,it can also relate to new ways of operating that alter current organization structure, processes, or practices in some novel fashion.
Operating innovations may require less capital and can add considerable value. Making internal changes, especially ones that produce measurable benefit is less risky because execution is quicker, results are more assured, and returns for the effort more predictable.
In contrast, innovating new market offerings adds factors to the mix that can magnify risk, uncertainty, and cost. Typically, new products require plans, take time to develop, and provide no guarantee of market acceptance and/or returns. Significant internal challenges also arise when innovating this way.
View from the Field
Years ago, while running an educational publishing services company the change from print-centric to digital product offerings created industry chaos and opportunity. To assist our clients, we created a new digital prototyping service that resulted in the rapid development of an online vocabulary offering.
The effort stretched us in a number of instructive ways. First off, long held assumptions quickly go out the window. Our many years of expertise in developing print content did not translate to the new digital medium. New content development skills, vendor partnerships, and workflows were all required.
Of course, challenges bring opportunity. In this case we were able to use technology and remote working arrangements to manage costs. Plus we were able to increase our value to clients and extend core capabilities into an emerging market segment.
Putting Things in Perspective
Doing innovation in middle market companies shares some features with startups or larger companies. It begins with a thorough understanding of present circumstances.
Knowledge of leadership intent, strategy and internal capability, including resources is particularly essential for smaller companies that may operate more informally and with fewer resources. Appreciating different ways to innovate further helps clarify the more doable and effective innovation path to pursue at the moment.
About the Author: “Through his company TSG Advisors, LLC, Todd Greenberg uses innovative diagnostic and implementation methods to help business owners and leadership teams build valuable companies. Todd’s 30 year business career includes executive positions in technology and publishing services industries and consulting assignments across diverse organizations. As a longstanding faculty member of the Center for Creative Leadership he develops next generation leaders in Fortune 100 Companies. Hear Todd’s Genius Talk at the Summit based on his development of an innovative online music education product that teaches kids to compose music.
“This post is part of a series of posts that the upcoming speakers of the 2013 XPX (Exit Planning Exchange) Summit are contributing. The theme of this year’s summit isThe Art and Science of Collaborative Innovation. The event will be widely attended by business owners and trusted advisors to privately-held companies who are preparing for a successful exit.
Originally posted by Todd S. Greenberg on April 19, 2013 at 3:43pm
