“Innovation distinguishes between a leader and a follower.” In fact, innovation distinguishes between those businesses that are followers and those that are laggards. The late Steve Jobs clearly understood the importance of continuous innovation to driving business performance. Boy did he hit the nail on the head!
Creating, embedding and sustaining a culture of innovation is certainly not easy. It takes giant leaps of faith, not resting on your laurels, and above all having great people all driving towards the same vision. Business history is littered with companies that have all too easily slipped between the cracks, moving from innovator to follower to laggard and suffering the inevitable downfall.
Innovators, Followers and Laggards
This blog highlights the secret of keeping your business ahead of the rest at a time when the future is ever more unpredictable.
To start, let’s be clear what we are talking about here when we refer to Innovators, Followers and Laggards. There are three types of organisations out there today.
Innovators – These businesses drive re-invention. They act for the consumer and the employee base. They are brave enough to think differently and create demand in the market – leading and shaping it for the rest. They are also humble enough to recognise the need to keep on innovating.
Followers – These are those who are flexible enough to adapt, but aren’t always quick or brave enough to be the first to do it. They learn from others and can be highly successful, but risk considerable market opportunity when they don’t do it quick enough.
Laggards – These are late adopters who are either complacent or arrogant in their approach. They rely on their experience to achieve success, and they unfortunately often display autocratic characteristics typical of market leaders, for whom the fall is normally greater when it comes.
It is not necessarily about any type of these three being ‘right’ or ‘wrong’, it’s more about being mindful of what you are trying to achieve, and what type of business you need to be.
Take HMV, the original ‘top dog for music’. They spent most of the 80s and 90s leading the way in CD and video sales; selling 16 tracks for just over £16! At one point they were so profitable that the House of Commons set up a select committee to investigate their profits. They were pioneers, bringing the interactive world of music to millions and becoming a one-stop shop for all things audio-visual. In 2002, HMV floated on the stock market valued at £1 billion pounds! However, fast-forward just a decade later and star-studded CD launches and events were replaced with uncertainty and fear. Going to HMV was like going to a charity shop, where you fished around the aisles for a classic album at a bargain price.
Down to a value of £15 million pounds, HMV had become an archetypal laggard, dwarfed by the entrepreneurial spirit of online retailers such as Amazon, and suffering from a lack of initiative of the type that keeps the likes of Game afloat. To truly transform their business they needed to transition to Innovator.
HMV’s story is a simple one. They became complacent, misread their market and customers, and did not have the people they needed to transform their business. Instead, they relied blindly on a now ancient retail business model and hoped for the best! They moved too easily from Innovator to Laggard, allowing their Followers to overtake and change the game on their behalf!
The Challenge for Innovators
Some argue that in the world of media, retail or technology what happened to HMV is inevitable; you ride the crest of the wave, gain as much money as possible and then your luck runs out. This is because the next great thing is always coming along to topple you. Is this not the inevitable challenge of being an Innovator, that unlike HMV, you continue to set such a clear path for others that you can only be overtaken by savvy, entrepreneurial businesses that learn all the lessons you have given them. When you look at the likes of Google, it’s clear that by setting your stall as an Innovator, creating this value in your business and then flooding your business with talent that live this value, you can constantly re-invent yourself and keep growing. Take Google Glass, TV or even Cars… quite a leap from a conventional search engine!
But Google aren’t alone in leading the way! ASOS, the online fashion retailer, have changed the nature of online shopping by becoming ‘your one stop fashion destination’ with personal shopper tips and no cost returns. Picking up on the decline of the high street, ASOS have capitalised on the shopper experience, making it easy to spend more in less time. More importantly, ASOS has a clear identity, a transparent intent and a sea of young staff all in tune with their target audience and what they want. This, more than anything else, drives their success.
The point is clear, despite their typical stereotype; Innovators are not all about blue sky thinking and whacky entrepreneurial ideas. What they have in common is they are continually adapting and gradually transforming their organisation through aligning their business intent with their talent. Only when you fully align these two fundamental elements will you truly reinvent yourself in the market and achieve Innovator status.
Quite clearly, being successful now does not equal success in the future. So in a time when our industries are constantly evolving, what will you do to make sure your business is not left behind?