Innovation is the key for business success

A marketing professional and consultant for 40 years says out of his experience that innovation is the fulcrum for business success. Peter Drucker said ‘there are only two revenue centers in a company – marketing & innovation. All the rest are costs.” The kind of statement that will not be looked at kindly by most executives in a company but it is true nevertheless.

In the global economy, which India has now entered, one cannot succeed except by ‘differentiation’. Technology is now so freely available; and so easily adopted that any differential can give a lead of a few months or a year for a business. Then all competitors come to the same level field. And once again the race starts.

So one-time differentiation is not enough and it has to be a sequential series of differentiation, which will help you to keep ahead of the competitors and keep occupying a special place in six inches of grey matter — the consumers mind. This differentiation will most often come from innovation.

In India, there is much talk about innovation at seminars. There are articles being written and awards being instituted like the Marico Foundation Awards. There now exists companies that help industry to improve its innovation capabilities like Erehwon of Bangalore and BestPraxClub of Mumbai. These developments can do a great deal of good for Indian industry, both in manufacturing and services.

For entrepreneurs, innovation is one of the three key ‘I’s necessary for success, along with independence and initiative. Since entrepreneurship is not for everyone, innovation is not for everyone. We need to create an environment for free play of innovation but we will never succeed in making Innovators of all those we have trained.

Most of us who work in companies are ‘sustainers’ — quite happy to do a job by rote, and quite happy with the status quo. But innovators come from the smaller group of perhaps 20% (Pareto’s Law) who are achievers, at whatever level of the organization they may be.

Our work places do not also encourage the flowering of innovation. Loyalty to the leader and the organization is mistaken for subservience and blind obedience. Any disagreement is taken as defiance. Any mistake made with good intention and with all the facts available at the time, is not forgotten and not excused. There is no role for constructive disobedience.

In the corporate world, when someone makes a mistake everyone runs for cover. At Microsoft the concerned top management try to put an end to that kind of thinking. It is fine to celebrate success, but it is more important to learn the lessons from failure. How a company deals with mistakes suggests how well it will bring out the best ideas and talents of its people and how effectively it will respond to change.

The environment in a country also has an impact on ‘innovation’ the emphasis on innovation is on design in Denmark; on engineering innovation in Germany; on electronics innovation in Japan; on textile and leather fashion in Italy. It is no wonder that base leather jackets are exported from Chennai at $80 and then finished, styled and labeled in Como, Italy and sold in Minnesota, USA for $300. Innovation creates this extraordinary premium.

Many times, innovation is also leader led. Where the leader carries the flag – and all others follow and assist to make the dream come true. And now companies in many FMCG segments are imitating this innovation of packing in sachets.. Imagine, four billion sachets of shampoo are now sold annually, which is 70% of total shampoo sales.

Innovation is not just about products and packaging but also about processing and systems and anything that can be done better, faster, cheaper and easier.

Thermoware containers now have a valve, so that hot chappatis will remain hot, but not get soggy with condensation. Spice Jet informs me of the flight delay by sms well on time, so that I need not get to the airport too early.

There is single use paper underwear where you save on laundry and feels like cloth; there are bifocals which are graded and do not show the dividing line; there are India Mark II water pumps which have made water available to thirsty villages and where cast iron pumps had earlier failed; there is ‘limited overs cricket’ which is taking the shine off long test matches and helps better attendance at the workplace. In many of these cases, the old adage proves right — necessity is the mother of invention.