Adapt or die: The business case for innovation

A few months ago, a senior HR person called up Inventium’s office asking to find out more about how we could help his organisation (a household name in the food industry) drive innovation.

We had a chat and he said he would speak to his chief executive about bringing us in. But low and behold, a couple of weeks later, he reported that the chief executive was not convinced there was a business case for innovation.

Yes, you read that correctly. The ‘not’ is not a typo.

Needless to say, I was gobsmacked. He was working in an industry that is under a huge amount of pressure, not only from the supermarkets and his suppliers, but some of the categories the organisation plays in are in natural decline.

Which brings me to today’s topic: the business case for innovation.

For me, it’s really simple. There are two key reasons why you should care about innovation.

The first is to grow — whether that is in size or impact. If you look at the world’s most innovative companies, it is hard to find one that hasn’t achieved significant growth through a diligent and focused effort on innovation.

Google, a company that is synonymous with innovation (and, unfortunately, a bit of a cliché to use when writing about innovation), is one of the best examples of this. After starting as a research project in 1996, in 2012 it recorded annual revenue of $50 billion.

The second reason to care about innovation is to avoid becoming irrelevant or business death. Not quite as inspiring as ‘to grow’, but a critical factor, nonetheless.

And unfortunately, the world is rife with examples of companies that have failed to innovate and are now either dead or on serious life support. Companies such as Kodak, Blockbuster, Atari, Nokia, BlackBerry, Borders and General Motors, and many, many more. All companies that were thought to be big and invincible in their heyday.

If you are still pondering the business case for innovation, I’d be very concerned about what your competitors are thinking and what they are actively doing to take away your customers and market share. And in the case of the company I mentioned above, we either have worked or are working with almost all of their major competitors.

If you are lucky enough to be a market leader — like Kodak who, at its peak, had over 90% market share — it’s easy to sit back and do nothing. But unless you recognise the business case for innovation and actually do something about it, you may end up becoming irrelevant and contemplating bankruptcy — just like Kodak.

This piece was first published on October 28, 2013.

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