I get the feeling that a lot of companies in the technology space are scared to strike out and do something innovative. Instead they’re watching each other, waiting until they can see where the industry is going, and then dutifully following.
Some companies have based their entire business practice on doing this. In fact it has a name - fast follower innovation. A classic example is Microsoft, where they move in to a market when they see a competitor making some money. But the problem with being a fast follower is that things are getting too fast to follow. This is why some companies are always playing catch up. This is clearly happening in the smart phone market where companies are desperately trying to regain lost ground from Android and the iPhone.
What these other companies need is:
- More faith in their own judgment.
- A clear vision for the future.
The first point depends on a strong corporate culture, and a decent CEO. The second point depends on defining what’s ideal, which is something I’ll touch on in this article.
Focus on what’s ideal
When I talk about what’s ideal, it doesn’t have to be feasible given the current set of technologies available. It’s all in the realm of tomorrow’s world, which is what makes it so powerful.
Example - the perfect car
My ideal car will never need refuelling, will be fast, comfortable, stylish, have plenty of room for luggage, can accommodate my entire family, and will emit no C02. My ideal computer will be thin, sturdy, lightweight, powerful, silent, and efficient. This is from a consumer perspective.
From a company perspective (and in particularly manufacturing) there’s already some well known things which make a product more ideal.
Firstly, to have as few components as possible. If one component can economically perform the task of multiple components then it should do. It reduces assembly time, reduces failure rates, reduces inventory, and countless other things. If companies are scared of innovating, then this is something they should try. During the last 100 years of manufacturing, reducing components has been a sure fire way to innovate. Here are some examples: the integrated chip, the macbook unibody, living hinge designs, and even object orientated programming in computing.
The next thing is to look at is demographic change. You can download fairly accurate data from the UK National Statistics website which gives you insight in to how the country will change in the next few years. People are getting older, and are retiring later. There’ll also be comparably fewer people of working age who’ll have to work harder. What products can help these people?
Another sure fire way to innovate is to try and boost service revenue. As our economies become more service orientated, it’s a safe bet that services are a way to innovate. A company with innovative services will be more attractive to a consumer. The iPod wasn’t necessarily the best hardware, but when incorporated with the iTunes service, it became a compelling proposition.
Underdeveloped parts of the system
My final example concerns looking for under developed parts of the system. Every system will have parts which have been neglected. A tremendous amount of effort has gone into developing processors, but not so much effort has been spent on track pads, or mice, or power adapters. Apple got some fairly easy wins by innovating in these areas. These parts of the system don’t require huge R&D budgets to make an impact, which means that other companies should have prioritised them as innovative opportunities.
There’s countless other ways to innovate, which aren’t terribly risky. I’d advise companies to try and exhaust all of these options before they resort to financial engineering, and outsourcing as a way to protect the bottom line. The future might seem uncertain, but some things can always be relied upon. Technology isn’t like the weather - it doesn’t take sudden U-turns. Have faith in the future, and innovate. It might be easier than you think.