Innovation’s Golden Opportunity

Submitted by Joseph Nettemeyer
on Tue, 03/08/2016
FOR THE PAST FIVE YEARS, OUR ECONOMY HAS BEEN GROWING AT ROUGHLY a 1 percent annual GDP. This can be considered marginal growth. In order to provide adequate opportunity for business growth, this number really needs to be closer to around 3 percent or better. In the current environment, the ability to innovate and position a business above and beyond the competition is critical. In a society where we have what some would consider to be an “excess of everything,” a manufacturing or distribution business needs to be able to provide unique and clearly defined value propositions in order to gain that crucial market share. For example, a particular company’s product may be third, fourth or fifth choice in the average customer’s mind when making a purchasing decision. If the value proposition for what is provided is not clearly defined and impactful, that specific company will eventually fail. The days when a company can be average and still sustain a healthy bottom line are over. It’s important to understand that the landscape of the world economy is shifting, and that innovation is a necessity for sustaining business growth.

The Information Technology Revolution

The days of sales personnel making cold calls are coming to an end. Society is in the midst of an information technology revolution that is continuing to shape how companies around the globe conduct everyday business. An organization can now deliver highly refined content more effectively and in a timelier manner. It can become difficult to fully embrace this evolution as the “old ways” have become so ingrained for the past halfcentury. However, in order to separate from the competition and stand out in the crowd, leaving behind the old business model is imperative. As stated above, the old business models are currently growing at a mere 1 percent per year.

The way that people want to be communicated with has changed. In the past, technical information was not readily available online for anyone who needed it. The individual making the buying decision would inevitably hit a roadblock and then make a phone call in order to fully understand everything they needed. This phone call would then give the company an opportunity to follow up with the caller with a sales presentation. These kinds of phone calls from the customer are drying up. Why? Because the information they are looking for is at their fingertips online. The challenge for businesses looking to stay ahead of the curve is to provide content in a compelling way that draws people to their particular website and engages them in an online conversation. Moving forward, it is clear that innovation will be in the form of thought leadership and not in the products that are offered.

Knowledge is Power

Thought leadership is what is going to truly separate a company from the competition. A company must evolve from being a peddler of products, benefits In a society with an “excess of everything,” a manufacturing or distribution business needs to be able to provide unique and clearly defined value propositions in order to gain that crucial market share and features into one that helps established and prospective customers solve specific problems. In the past, businesses got into the habit of looking at the competition, determining what they were offering and then making sure that their own company was also offering the same product. The mindset was, “if they’re offering this product, then we need to as well.” That type of mentality leads to very little traction with customers. If the only differentiator from the competition is price, there is not enough value being added in order to rise up in the marketplace. In manufacturing and distribution, customers are always trying to improve their operation. There are always challenges that need to be overcome and goals that need to be met. This is why communication with the customer is key. They can buy a part anywhere, but if a company can provide effective thought leadership and give possible solutions, there is more value being added. Leadership in the business community sets particular goals and expectations inside of their own organizations. The key is to become a company that can help these businesses meet these goals through focused thought leadership. Understanding a customer’s pain points and developing optimal, innovative solutions for them is what will drive growth in the industry. These solutions could come in the form of on-site inventory management or process improvement.

Bringing About Change

Visualizing exactly how an organization can make a change is easier said than done. Far too often, managers will make these radical visualizations without giving enough thought to the practicality of the vision.

Does the company’s current infrastructure allow for this vision to come to fruition?

Is the workforce capable of the new vision?

In order for real change and innovation to happen within an organization, everyone needs to be working toward a common goal. When a company dives in, they must go “all-in.”

From top to bottom, management must put an emphasis on education, training and facilitating a desire to compete.

It’s a long and tedious process, but if the organization can clear the necessary hurdles and move forward with becoming a thought leader and providing solutions instead of just products, real innovation can occur.

A lesson for me is that I need to involve you earlier in the program.

You were tireless in your support and it will not be forgotten!

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