Is Innovation Driving Your Business Growth?
Taco Bell has been listed as #1 on Entrepreneur’s Franchise 500 list for two years straight. And it maintains that position because its culture of innovation allows it to not only adapt to change but to act as a change catalyst. A recent article in Entrepreneur magazine highlighted how Taco Bell has a culture of encouraging its franchisees to experiment with bold new ideas. For example, while Taco Bell is best known for its affordable Mexican fast food, they experimented with Taco Bell’s Cantina, an urban, alcohol-serving model that’s now established in 28 cities across the United States. It’s this willingness to experiment with new ideas that have helped Taco Bell maintain 14 years of consistent positive growth.
Some business owners might look at the Taco Bell story as admirable but also as an outlier of sorts. But the truth is that the only companies that survive long-term are those that are willing to continuously innovate with customer needs at the center. There is no shortage of companies that collapsed (or lost significant market share) because they failed to innovate: Blockbuster, who didn’t foresee a growing customer desire to stream videos over the internet. Nokia, who wouldn’t adapt to changing expectations around user interfaces. Borders, who was too slow to respond to customers' desire to read books on portable devices. Each of these companies were strong players in their fields but their failure to innovate allowed smaller competitors to dominate them.
Is Your Business Innovation Driven?
Companies that are innovation driven have two main characteristics in common:
They are always experimenting with new ideas.
Those new ideas are driven by the needs of their customers.
Let’s dig a little bit deeper. Any company that isn’t experimenting, isn’t growing. And companies that don’t grow, don’t survive. So, every business should be experimenting with new ideas. Google encourages all employees to spend 20% of their time working on projects and ideas they believe may benefit Google’s mission and growth. Amazon encourages innovation by allowing any employee to submit a new idea and have it seriously considered. And Nike constantly experiments with bold ideas on a small scale so that employees can try unconventional things. What’s the difference between you and these large companies? Even if you only spent 5% of your time innovating you could position your business to better compete and meet (and exceed) customer expectations.
Where To Find New Ideas
If you’re buried knee-deep in the current needs and crises of your company, it's natural to feel like you don’t have the time or bandwidth to experiment. The good news is that you don’t have to do this alone. One of the primary sources of good new ideas is your frontline workers. For example, if you’re running a restaurant, your cashier might be better positioned to understand how the customer experience could be improved. They can see simple things: If your current payment system is cumbersome and frustrating. If the décor is inviting. If signage confuses customers. If most patrons squint when reading the menu.
Asking frontline workers for their input can make your employees feel valued and more invested in your business. You might also consider regularly attending conferences and reading literature (or listening to audio content) from industry leaders to find out about the latest trends in your field. These industry leaders can make it easier for you to understand how your field is evolving and give you the foundational data on which all good innovation is built.
What Is A Good Idea?
It is important to understand that when you are innovating, you are co-creating with your customers. All new ideas should be driven by customer needs. But beyond that base level requirement, a good idea is also one that is feasible and viable. Is the new idea something that your company can implement? And is it something that can be profitable? For example, a company bringing in $1 million of revenue annually may find it difficult to implement an innovation that will cost $60 million to create. And on the other side of that coin, it wouldn’t make sense to create an innovation that no one is willing to pay for or that costs more than customers are willing to pay. But this usually isn’t something you can figure out theoretically. You’ll need to bring your new ideas to the marketplace on a small scale first. Consider creating a prototype you can test on current customers. Then launch the product/service to the public in a limited capacity. This will give you an opportunity to test the product/service, get customer feedback, and make changes without investing large amounts of capital upfront.
Fear Is An Innovation Stopper
Fear is sneaky. It often appears as genuine and justified concerns. In the realm of business, it might sound like, “We can’t afford to innovate this year. We need to focus on what we know.” But fear can stop you from taking any chance on new ideas and thus prevent your business from gaining new customers and market share. If you must fear anything, fear being left behind by competitors who have the courage to experiment and bring those new ideas to the market.
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