Friday, October 28, 2011

Innovation at it's Best

When Jonah Staw brought up the idea of selling mis-matched socks in threes while having dinner with his friends back in 2004, his friends at the table started laughing at him and told him it was a terrible idea. WHY? Because we live in a society where socks are meant to be sold in matching pairs. When I shared the same idea with my friends over dinner just to see how they would react, strangely enough, I received the same reaction as Jonah did 7 years ago. It was only after telling my friends that this crazy sock idea now known as LittleMissMatched, which operates in over 850 department stores in the United States with over $50 million in sales a year, that they all unanimously changed their minds. Why is it that people today are unable to think  "out of the box"? Have we been programmed to think in a certain way after all the education we received and after all the strategies employed by marketers? Clearly Jonah Staw, CEO of LittleMissMatched dared to be different or as the late Steve Job's would say, "stay foolish".

In today's business environment, where companies compete like crazy, daring to be "different" is the key to companies having the winning edge over the rest. When I say "different", I mean a 180 degree change. Even though companies are deeply committed to the concept of differentiation, at any moment they are also intensely aware of what their competitors are doing, and it is this competitive vigilance that ultimately pushes them down a path of conformity.  This causes a huge disconnect between the way companies talk about their products and brands, and the way consumers ultimately experience them. So when is it the right time for change?

Companies usually make incremental changes to their existing products and services to stay in the game. With an excess of similar offerings in the marketplace all claiming to be different, it's nearly impossible for businesses to get their products noticed and command a premium for their efforts. This behavior is common in successful companies operating in mature industries. The mistake they make is that they become complacent and stop innovating and they find themselves on a path that gets narrower and narrower. Eventually when they reach the end of the path, their customers would have forsaken them for a new offering that nobody saw coming. It's only now when they are backed into the corner with no choices that they decide to move in a new direction. The bottom line, is that companies that try to differentiate themselves by focusing on incremental innovation instead of game-changing, disruptive innovation will differentiate themselves right out of the business. Instead, companies should be executing game changing ideas like LittleMissMatched, at the peak of their success. In that way, they will continuously turn consumers expectations upside down and take an industry into the next generation, and Apple, has used this concept very well over the past decade.

In companies, especially in the marketing department, the term "creative" and "innovative" have been over used, that now those terms have become a cliche.  Are companies actually practicing what they preach? In an interview with a McKinsey panel, a Chief Strategy Officer from a Fortune 500 company said that 20% of their new products are now required to be driven by innovation. However when questioned by the panel if the company was setting aside 20% of their time for innovation, his answer was a no. Innovation just doesn't happen. Organizations need to change culturally and structurally to enable innovative thinking.

I personally feel that we are already in the midst of the next revolution and the best time to execute an innovative or "crazy" idea would be now. Majority of companies are inhibiting their growth and potential for success in a "monkey see monkey do" business environment where they are changing for the sake of changing to keep up with their competitors. They are too busy looking for the next big idea that they often miss out on the simplest ones that could change an industry. All of us have the ability to create our own original ideas that can change the world in which we live in. When we do have an idea, we need to be brave, take a big leap of faith and act on it. Be wrong at the start to be right at the end. Jonah Staw and many other successful entrepreneurs past and present had the guts to do this. So whats stopping you? I will leave you with one of my favorite commercials where a simple idea has a huge  potential to change the way we do things. (P.S I love the song)

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