Whether you are a business professional in a big company, or an entrepreneur with a startup, innovation is a key strategy. Many people believe that new ideas are the critical element of innovation, but in my experience as a mentor and investor, long-term business success is more about implementation than ideas. Everyone has ideas, but only a few can make them happen.
For example, no one predicted that Howard Schultz could take the simple idea of a better coffee experience called Starbucks, and innovate it into a successful chain of almost 34,000 shops in 80 countries. Obviously, his result goes well beyond the idea of charging a premium for better beans and service. He created a culture of community and human connection that everyone still loves.
So here are my own top recommendations on how to think about your business aspirations, and put innovation in perspective among all the other priorities you will need to achieve success and satisfaction with your role on the road ahead. You will see that I believe innovation is only one of many factors that ultimately determine your position with customers and your own legacy:
- Ideas are everywhere – success is all about execution. In my experience, ideas are a dime a dozen, and every investor is wary of the ‘idea person.’ We are looking for people who can lead a team and turn any idea into a business. In communication to all, focus on your experience and determination to deliver results, no matter what the challenges.
- Create an appealing vision, mission and purpose. Vision is the big picture that all constituents can relate to. Mission is the road map to get there. Purpose defines the feeling that everyone wants to have from helping others and doing good for the world. You don’t have a business until you have all of these and can communicate them well.
- Search for customer pain rather than high margins. New businesses driven only by a passion for big profit margins, rather than customer value and a higher cause, are perennially high risk with low satisfaction for you and the team. To be successful, and leave a positive legacy, you need a team of motivated employees and loyal customers.
- Experiment and pivot to avoid ‘big bang’ expectations. Developing the ideal product the first time around is unlikely, high risk, and very expensive in today’s chaotic market. More success has been logged with companies like Amazon, which lightly funds many business model experiments each year, and is not hesitant to pivot or learn from failures.
- Look for technologies to adapt from other domains. Elon Musk with SpaceX is an example of a new business bringing in technologies from artificial intelligence and solar power to develop smart and reusable rockets to do satellite delivery and space travel. Insights from these technologies are often not seen by the original inventor industries.
- Incent team members to work on possible improvements. This means rewards rather than penalties for sponsoring new innovations internally, even if they sometimes fail. Be willing to rotate change agents across organizations for opportunities and spreading lessons learned. Provide outside training opportunities and hiring to promote this culture.
- New customers don’t see incremental improvements. Making something ten percent better than competitors doesn’t easily translate into a great business. You need more dramatic value improvement, maybe ten times, to get the attention of new and existing customers. This usually requires a new paradigm, real creativity, or dramatic innovation.
- Be willing to share technology to promote standards. Tesla has found that sharing many of their battery patents has expanded the market for all electric vehicle providers, as well as attracted the very best engineers to join Tesla’s team. Open sharing also increases market acceptance of new products and expedites support infrastructures.
- Analyze all failures for learning opportunities. First, failure is not always bad. In every business it is sometimes bad, sometimes inevitable, and always good for learning. Define the leadership attitudes and activities required to effectively detect and analyze failures, then establish a system for extracting learning and propagating it to all your employees.
I believe all these insights apply to all businesses, no matter what domain they may fall into, and how mature they are today. Over time, how you handle these becomes the culture that all team members learn to live with and drive your long-term vitality and success. Thus it behooves you as a business professional, or entrepreneur, to focus first on your own mindset, starting today.