Innovate or Perish is a battle cry that I have long espoused to my clients. I can’t think of a better example of what can happen to those companies that fail to innovate than the rumors circulating about the Tribune Co. The Tribune Co., owner of the Chicago Tribune, Los Angeles Times, and other once revered trophy brands is hemorrhaging under the burden of huge debt obligations, insufficient cash flow, and is rumored to be filing for bankruptcy as early as this week. The emergence of better alternative news sources has been hurting the newspaper industry for years now, but when you combine the rapid emergence of new media options with the crushing blow of the recession, it may just be too much for an old media lagger to survive…
When was the last time you actually read a print version of a newspaper? Unless I have a few minutes to kill in an airport or a lobby somewhere I’ll never touch a newspaper. By the time you read something in the newspaper it’s simply old news…If you rely upon the newspaper to keep you informed, here’s a hint…you’re out of touch. However the bigger issue here is not how you choose to receive your media, but rather out of touch company leadership that doesn’t understand the importance of innovation as it relates to corporate sustainability.
If you’re a CEO reading this post ask yourself this question: How disruptive is your business model? Without a focus on disruptive innovation you are merely building your business model on a “me too” platform of mediocrity. Disruptive business models focus on creating, disintermediating, refining, reengineering or optimizing a product/service, role/function/practice, category, market, sector, or industry.
The most successful companies incorporate disruptive thinking into all of their business and management practices to gain distinctive competitive value propositions. “Me Too” companies fight to eek out market share in an attempt to survive while disruptive companies become category dominant brands insuring sustainability. So why do so many established and often well managed companies struggle with disruptive innovation? Many times it is simply because companies have been doing the same things, in the same ways, and for the same reasons for so long that they struggle with the concept of change.
As a CEO Coach many of my engagements with chief executives focus on helping them to embrace change through disruptive innovation. Why didn’t the railroads innovate? Why didn’t Folgers recognize the retail consumer demand for coffee and develop a “Starbucks” type business model? Why didn’t IBM see Dell and Gateway coming? Why have American auto-makers been relegated to inferior brands when contrasted to their European and Asian counterparts? How did the brick and mortar book stores let Amazon get the jump on them? I could go on-and-on with more examples, but the answer to these questions are quite simple…The established companies become focused on making incremental gains through process improvements and were satisfied with their business models and didn’t even see the innovators coming until it was too late. Their focus shifted from managing opportunities to managing risk, which in turn allowed them to manage themselves into brand decline…
At one end of the spectrum take a look at the companies receiving investment from venture capital and private equity firms, and on the other end of the spectrum observe virtually any category dominant brand and you’ll find companies with a disruptive focus putting the proverbial squeeze on the “me too” firms occupying space in the middle of the spectrum. With the continued rapid development of technology taking the concept of globalization and turning it into hard reality facing businesses of all sizes, it is time for executives and entrepreneurs to examine their current business models from a disruptive perspective. Ask yourself the following questions:
- When was the last time your business embraced change and did something innovative?
- When was the last time you rolled-out a new product?
- When was the last time you entered a new market?
- Are any of your executives thought leaders?
- When was the last time you sought out a strategic partner to exploit a market opportunity?
- Do you settle for just managing your employees or do you inspire them to become innovators?
- Has your business embraced social media?
- When was the last time your executive team brought in some new blood by recruiting a rock star?
- Does anyone on your executive team have a coach or mentor?
- Has anyone on your executive team attended a conference on strategy, innovation or disruption in the last year?
If you’re an executive or entrepreneur and you can’t answer yes to the majority of the questions above then your company is likely a market lagger as opposed to a market leader. If you continue to do the same things that you have always done in today’s current market environment you will see your market share erode, your brand go into decline, your talent and customers jump ship, and your potential never be realized. Remember the definition of insanity is continuing to do the same things while expecting different results. Bottom line…change, innovate, disrupt and prosper.