Innovation without a market is like cooking a meal for one – you can still feel satisfied, even if no one else would eat it. But what happens when you start serving your cuisine du jour to others?
The decision to innovate can be a difficult one, as innovation typically involves a longer term commitment of people, resources and effort. When it is successful, there is no doubt about its benefits, both for your business and your customers.
However, innovation will only be successful when there is a marketplace willing to buy the output. If you don’t agree, you will after watching a couple of episodes of Shark Tank.
So, before you commit to innovation, you better ask yourself a couple of critical questions.
Invest for today or invest for tomorrow?
All businesses come to a point in their growth when it is time to consider either consolidating their existing strengths or innovating. So what are some of the drivers that can influence such a decision?
- shifting demand for existing products or services;
- emerging trends or disruptions to the existing marketplace;
- challenging campaigns by direct competitors;
- changing consumption trends of customers; or
- reducing sales margins or internal cost pressures.
Understanding your drivers for innovation is important because innovation is neither a risk-free nor cost-free process. Sure, you can take a piece of paper and sketch out some ideas. However, conducting market research and then prototyping, piloting, funding and protecting your innovation will require a big investment, usually with great personal risk.
Know thy marketplace and one will know thy self
If you want to know whether it is time to innovate then simply ask your marketplace. And I know that you know that deep down this is the truth. And any denial of this is simply a mechanism to avoid the discomfort that the revelations of the marketplace can cause you.
How would you respond if your marketplace told you: we no longer love your product?
Well, history has shown that businesses have responded in different ways with varying degrees of success. Some companies have chosen to ignore their marketplace and perished (IBM, Kodak, Nokia). Others have listened to their marketplace and, interestingly, the marketplace of other industries, and flourished (AirBnB, Zappos, Apple).
The case for knowing your marketplace is simple: if you want your business to profit in the long-term, then innovation is your biggest asset to respond to a changing marketplace. Today, we are experiencing a shift in the way businesses is conducted on a scale not seen since the Industrial Revolution. So, what should you be asking yourself and your people to really understand the need for innovation?