World famous scientist Albert Einstein once remarked: “Logic will get you from A to B. Imagination will take you everywhere.” To be truly great companies, every one of us however small must learn to innovate however small the innovation. Innovation distinguishes us from competition and helps add value to the customer. Innovation on all fronts is one of the key levers of success. This is especially true in the case of start ups and entrepreneurial ventures.
It is innovation that distinguishes a leader from a follower.
Innovation needs to be distinguished from invention. While invention is finding something new (and that may be great by itself), but unless it creates value it is not innovation. By that definition any idea however small that creates value for the company (and by extension is found valuable by the customer who is willing to pay a price for it) either through increased revenues or reduction in costs can be classified as an innovation. Second, innovation need not be something entirely new. It can be an improvement on or adapting what someone has used successfully in some other domain or context . Basically, it’s something that solves the problem at hand and creates value. Steve Jobs, for example, got many of his ideas, which he later implement at Apple, from his frequent visits to the Eastman Kodak Company, more commonly known as Kodak. He was thus able to make products at Apple differ based on its look and feel and spawned a whole breed of Apple users who swore by the product.
Recipe for success
Especially for an entrepreneurial venture and small firms wanting to grow, innovations in all areas of the business hold the key. In fact, continued innovation is a sure recipe for success and it is something I strongly advocate entrepreneurs to include a chapter in their Business Plans to how they propose to innovate and the time and money investment that they propose to make.
This needs to be both implemented and continuously monitored.
Early on in my career as an entrepreneur I realised three things:
— The value of innovation – however small
— As much as possiblen look at one disruptive innovation that impacts the industry
— Implement it fast – 90per cent of the value of any innovation lies in the speed of implementation.
My first tentative foray into entrepreneurship was through the manufacturing and marketing of motor pumps. I invested 50 per cent of my savings into the venture and it turned out to be a disaster. There were several pump manufacturers in Coimbatore and our product was not unique. The first lesson that we learnt therefore was to make ourselves “unique” and differentiate ourselves from competition. Until then, I had learnt about USP (unique selling proposition) via case studies at business school but through this real-life experience I learnt about translating that to marketplace realities.
USP is key
Simple enough and fairly obvious, but many folks doing business still make thisbasic mistake: of not defining the USP of their product / service and differentiating one’s product /service. Unless you differentiate yourself on a parameter that customer’s value, you are only competing on price and that is not an effective or sustainable long-term proposition.
Once you determine the pain that a potential consumer faces and you come up with a solution that can take away that pain at a price point that is considered “value”, half thebattle is won. But this is easier said than done. This is a lesson that I learnt the hard way, thus in all my efforts henceforth “innovation” (however small that it may be) has been the cornerstone of whatever I have tried to do. One has to stop doing all the things that others have done, and found out don’t work.
Based on a market survey of customers and dealers that we did ourselves, we found that one of the biggest problems customers of motor pumps faced was the water overflowing from the overhead tanks. And water was a precious resource. We decided to therefore try and innovate; and based on a scanning of available product literature (those days the internet was not an option) and through brainstorming we build a concept. The solution to differentiate our motor was to have a sensor at both ends (overhead tank and the ground level tank) that would sense the availability of water and automatically switch on or switch off the pump. It was an innovation back then and there was no other similar product in the market then.
Left behind in the race
We built a prototype, and branded it ‘MAGIK” — a great idea but as we learnt, a great idea is only as good as how well and fast it is implemented and turned into marketplace reality. Our team could not come up with a scalable version of the product over the next 6 or 7 months and by the time we were, we realised the space was taken.
We had experienced the loss of the first-mover advantage. We very quickly learnt the practical wisdom of this wonderful saying: “An idea that is developed and put into action is more important than an idea that exists only as an idea.” - Buddha
In all my subsequent attempts, irrespective of me having succeeded or failed, innovation has been the foundation of everything I have tried to do. Innovating by definition means that there is a big element of the risk of failure involved but this quote by Woody Allen, best expresses the importance of failure and innovation. He says, "If you're not failing every now and again, it's a sign you're not doing anything very innovative."
Not innovating in today’s business context means that, more often than not, you will be left far behind by competition.
(This article is first of a two-part series on the subject of ‘Innovation and Enterprise’)