When it comes to innovation, topping 2013’s banner year will be a tough one. Twitter went public. 3-D printing went mainstream. Tesla turned a profit. Startup money flowed.
So what did we learn last year that we might apply and extend into the next? Here are five strategies for keeping innovation flowing and the business growing.
2013 saw the bankruptcy of a global brand and innovation icon. Kodak invented the digital camera in its Rochester labs. But the company sequestered the technology from the start, fearing it would lead to the demise of film. It did. It just wasn’t Kodak that commercialized and then capitalized on the disruptive innovation. The company viewed itself as a “chemical company” to its dying end by holding onto film while it struggled to get into the saturated inkjet printer market. Don’t view killing off profitable products as a problem. If you don’t eat your lunch (and reinvent yourself), someone else will.
A couple of years ago Netflix announced that its DVD rentals and streaming video service would separate into two distinct offerings. Sure, dividing up its two business models would make life easier for the company internally. But customers hated the idea because it meant they had to split their existing subscription into two and pay for each separately. Netflix listened and apologized. Outraged customers returned in 2013, and Wall Street responded (the company’s stock jumped almost 300% last year). The lesson: Keep things simple for customers even if it means absorbing the complexity.
Tackling small problems leads to incremental innovation. Focusing on seemingly insurmountable challenges can lead to solutions that create new categories and markets. TruTag Technologies’ edible bar codes, introduced last year for example, address the growing pharmaceutical counterfeiting crisis in developing countries—and the World Economic Forum selected the company as a Technology Pioneer to watch in 2014.
Last year entrepreneurs embraced the Lean Startup approach like it was the next Atkins diet. But staying lean isn’t just for hungry upstarts. Big companies are going lean too. Taking a tip from Amazon CEO Jeff Bezos, it’s essential to keep teams small and nimble. Forget six-month market research projects, multi-year change management programs, and annual strategic planning offsites. Staying lean means working with the limited resources you have, quickly testing ideas, and then adapting. There’s no failure, only learning.
The old adage "if you make it, they will come" was flipped around in 2013. Last year, 3 million people pledged $480 million to about 20,000 Kickstarter projects. Crowdfunded visions and cheap one-off prototypes now produce paying customers and uncover market opportunities before anything tangible exists—a true 180 from old-school business models with meticulous, five-year financial projections.
Not all of 2013’s lessons were new, a commentary itself on the state of innovation (as Blockbuster, Encyclopedia Britannica, and Blackberry for example can attest). As we move into 2014, we must remind ourselves about what we already know while keeping an eye on what’s changing. Doing so can mean the difference between disrupting and being disrupted.
[Image: Abstract via Shutterstock]