A colleague from our FEI LinkedIn group recently forwarded to us the article, Innovation dilemma for CEOs in down economy, written by Mark Atkins, CEO of Invention Machine; which takes a closer look at four suggestions CEOs should implement to drive innovation within an organization through a recession period.
In this article, Mark first mentions 2 key factors that are driving a need for new product enhancements and innovation. The first is that about 70% of products that are generating revenue today will soon be obsolete within a span of five years. The second factor is that 60% of the baby boomer workforce that helped take companies to new innovative heights will soon retire and will be replaced by a more tech savvy group.
With this in mind, Mark offers the four following suggestions:
1. Drive the innovation agenda:
CEOs must stress the importance of the innovation agenda to all employees. After all, innovation almost always starts from the top. Mark gives the example of how Steve Jobs from Apple Inc. 'rolls up his sleeves and launches a new product every year.' Even through a recession, CEOs should not cut R & D budgets, but should encourage departments to keep delivering innovative products.
2. Encourage new product development and enhance existing products
Since most of the revenue-generating products will become obsolete in the next five years, there must be a focus on new product development and the re-engineering of existing products for new markets, which Mark mentions in his article as 'create or perish'. Companies should invest their time in discovering the evolving needs of its current customers as well.
3. Invest in technology to drive repeatable innovation
Hands down, best-in class companies are more likely to have a successful innovative process. Why's that? Best-in class companies invest heavily in technology that creates innovation repeatedly instead of a one-hit wonder.
4. Track return on innovation closely
Investments in new product development and innovation must yield an attractive ROI. Concepts and ideas must come into place, each and every time.
Taking a look back at some best-in class companies like Apple, Nokia, Pixar, and Google to name a few, all of these companies share one thing in common'they continue to innovate time and time again even through a struggling economy. They've all fostered these four steps, and have rendered tremendous success in their innovation practices. Encouraging product innovation throughout these organizations has proven critical to their efforts in maintaining a competitive edge.