It’s obvious to say that most established businesses are good at what they do. They understand their product or service, they understand their market, they understand their competitors, and they understand their customer. So why do so many businesses reach a stage in their growth lifecycle where they stagnate, or get trapped in their niche?
Sometimes it can be market saturation, or market maturity. Both are external factors that can impact on businesses that maintain a narrow view of the world. Sometimes it can be pure internal time constraint. That old chestnut which is all your time spent “in” the business and not enough time working “on” the business.
Most often though I find it’s just a lack of innovation. A business without a steady flow of innovation is like breathing in an airtight room. You’ll be fine for a while breathing the existing oxygen in the room, and you’ll get by for another period breathing air you’ve recycled, but without a flow of fresh oxygen into the room you’ll eventually start to slow down. If nothing significant changes from that point, you’re on the slippery slope to oblivion.
At start up phase businesses are nearly all innovation. They’re breaking into or establishing their market, they’re setting up their teams and defining their business parameters, plus they’re learning about the competitive landscape. All these activities require constant innovation as businesses learn what works for them, establish their structures, and constantly adapt to a changing landscape.
Then at a point a business has a reliable revenue stream, a set of products or services in the market, a set in development, and established structures and process. It’s at this point that innovation can often start to be strangled within a business. You may hear employees say things like, “that’s how we do things round here”, or “that’s the way we’ve always done it”. To be fair this attitude is one resulting from success and has become a ‘safe’ default position. Using the rear view mirror we’re seeing what worked before, and assuming it will work in the future.
This is dangerous ground for a business culturally. The knowledge needed to maintain your existing business is widespread, deep, and no doubt critical to maintaining what you already have. Investing in what already exists is seen as smart money and good ROI, where investing in innovation can be seen as weak ROI and low priority. As time goes on, however, this path could mean the knowledge and skills needed for future growth may not exist within your businesses walls.
Business leaders that become aware the innovation oxygen in their room is becoming thin have a number of different paths to choose. They can invest in innovation through pilots and experiments (without a tight ROI view); implement and encourage a reward for innovation framework; carve time for people to increase cooperation and learning; and augment the expertise in the business with outside expertise.
Successful long term business leaders are able to grow their present business while ensuring they have an eye on their future business. The key to this is making room for consistent innovation.
If you sense your business is losing its innovation Mojo, talk to us at 521.
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