In my new book Relentless Innovation we examine the firms that innovate consistently and successfully over a long period of time. Firms like Apple, 3M, Google, P&G and W.L. Gore are just some of the firms I think are “Relentless Innovators”. What you may be thinking is: Is Relentless, sustained innovation really necessary?
We live in an era of almost unprecedented change, driven by a number of interlocking factors, any one of which in isolation would suggest innovation is valuable, but taken in combination they point to a future where only Relentless Innovators will thrive. Let’s look at just a couple of those factors:
- Ever increasing customer demand and expectation – Consumers have become accustomed to new, and better products that are updated or replaced ever more rapidly. We expect new products, new features and new capabilities from existing products and services, and new products and services to simplify our lives. Consumer demand and expectation is driving the need for more innovation.
- Rapid shifts in technology. Today, every person with a smart phone is a massive consumer of information and a significant producer of information as well. As we have more information, we need ways to consume it, understand it, store it and use it effectively. The explosion in information – the creation, sharing and management of information – drives new needs and new expectations.
- Globalization. We have competition from far more firms, in far more geographies, than ever before. As trade barriers fall and manufacturing power shifts, new products and services are available from far more firms than ever before, increasing competition.
- Shrinking product life cycles. As new products become available and customer demands increase, we have far less affinity and loyalty to existing products and services. Because there are more options available, we shift our allegiances far more readily, reducing product life cycles and forcing product and service firms to update their offerings more regularly.
- The cost of entry is falling, especially on the web. New entrants and substitutes to existing products and services can enter a market and gain scale quickly, especially using the web and mobile devices. This means that firms that had a previously unassailable position are under attack by many new entrants and substitutes which offer new products and services.
- Layoffs create new entrepreneurs and innovators. History has shown that there is an inevitable flowering of innovation and entrepreneurship after a significant downturn, as many of the people who are downsized from their corporate jobs start new businesses rather than re-enter the corporate workforce. These new entrepreneurs and innovators create thousands of new ideas, new products and services that disrupt the existing order.
All of these factors are contributing to the need for far more innovation. As I state in the book, in the near future the concept of a “fast follower” may not exist, since the pace of change is moving so quickly. Firms that rely less on innovation and more on following industry leaders may find that they simply can’t follow fast enough, or the market won’t select one long term leader that enables firms to follow one product or trend. Firms that don’t or won’t innovate consistently over time will simply fall further and further behind. See a PowerPoint that expands these ideas posted on Slideshare..
Innovation is the new competitive advantage. Relentless Innovators already understand this. Do you?