A guiding principle for startup success, as well as the long-term health of a mature business, is a liberal dose of innovation at the beginning, with more of the same on a continuing basis. Unfortunately, innovation means change, and most business professionals and existing customers, by nature, hate change. Because of this, it is common for companies to grow more static over time.
In fact, innovation needs to be an integral part of the company culture and every process from the beginning. This takes leadership from the top, and an ongoing focus on market change, customer feedback, and internal measurement and rewards. For example, Google has institutionalized innovation through a manifesto initiated by Marissa Mayer in her early days as a VP at Google.
I believe these nine principles of innovation, paraphrased here, should be adopted by every entrepreneur and every business executive, as they hold the keys to long-term health and success in every market served:
- Demand and reward innovation from everyone. Business leadership and innovation implementation still need to be visible and supported by all management, through actions as well as messages. Executives should solicit new ideas from everyone at every level, both inside the organization and outside, top-down and bottom-up.
- Let customer value be the driver, rather than cost savings. When innovations are driven by increased customer value and satisfaction, business growth will come naturally from repeat business, new customers, and referrals. Delighted customers will motivate employees, and the value will spread to the greater community and society.
- Aim for an order-of-magnitude innovation improvement. “Nice to have” features or a ten percent cost advantage is not convincing or competitive these days. While many small innovations should not be overlooked for their cumulative value, to get customer attention, you need innovations that represent a tenfold improvement in cost or function.
- Focus on translating new technology into solutions. From a customer perspective, new technology does not have value until it provides a solution that meets their needs. For Google, this led to their voice-activated personal assistant, better maps, and the prospect of self-driving cars. Technology innovation alone is necessary, but not sufficient.
- Innovations need real market feedback and iterations. Too many times innovations that aren’t perfect the first time never get a second look and die an expensive death. Others get caught in analysis paralysis and never get exposed to real customers. Remember that the market is continuously changing, so “rinse and repeat” is the order of the day.
- Allocate one-fifth of every workday to the pursuit of innovation. Start with a focus on hiring people who have a track record as change agents, and encourage them to spend twenty percent of their work time on new ideas and innovations, both within and outside the job boundaries. Make sure you establish compensation and rewards to support this strategy.
- Don’t be reluctant to share your efforts with your industry. Information sharing, such as through open source and white papers, will increase market acceptance of your innovation, and allow concurrent work on integration and standardization. You need others for collaboration and feedback, and you need their sharing of their ideas.
- Treat failures as a badge of courage and as learning opportunities. Thomas Edison called every failure a success, as each one taught him what didn’t work. Learn to fail fast and fail cheap to keep up with today’s rapidly changing and highly competitive marketplace. Failed experiments should not have negativity or penalties associated with them.
- Connect your innovation efforts to a higher purpose. Employees think harder and get more satisfaction if they believe their innovations will positively impact the greater good and the environment. Customers view companies that give back as more trustworthy and attractive than companies that don’t. Set and communicate real legacy goals for the business.
The rate of change and competition in the world is increasing rather than decreasing. This is all the more reason for no more excuses, delays, or negativity about the costs of change. It’s time to create your innovation manifesto for leading the way, rather than the “business as usual” struggling to keep up.