The Essence of Business IV - Innovation

The Essence of Business IV - Innovation

http://www.hwswworld.com/wp/?p=125

Today is the very last day of year 2006, time runs absurdly fast. A lot of things happened during the past year, something bad, something good, in China, in the US, in the world, in our company and outside our company. Overall 2006 is a good year for us, and I am expecting year 2007 would be a great year for us again

In the paper titled The Innovative Organization written by Peter Drucker, he defines how an organization should behave to be innovative, and he think being creative is not being innovative. The paper was written in 1982, more than two decades, is his view on innovative organization still valid in the new economy?

In my perspective, innovation is probably most important sweet spot that a business has to aim, strick and stick with. Innovation can be technical and business-wise. WalMart is definitely not a high-tech company, in whatever aspect, and WalMart was not the very first supermarket in the retail space, K-Mart and Sears (now they were merged togther) were well ahead of WalMart. What made WalMart stand out of a handful of strong competitors? Someone may contribute it to the great leadership of Sam Walton, and others may contribute it to the state-of-the-art satillite communication system deployed at WalMart in linking with all of its warehouses, chain stores, suppliers and the headquarter. The answer is its business innovation on best breed of supplier chain management that leads to it highly competitive pricing strategy. Similar sucess was achieved by Kinko (now FedEx Kinko), I hve an impression Kinko chain stores are very agressive on adopting new technolgies, and make those small businessmen’s daily practice easy. WalMart was, and still is a family business, Kinko was a partnership business, and there were no venture capital involed, yet they still achieved great success. Of course, I might give you more live examples similar to WalMat and Kinko, which are in traditional business. Now in high-tech business, Dell is an great example, its Direct Sales business model has made Dell to be one of the Fortune 500 without significant R & D spending. Business Innovation is the left arm of Innovation, now how about Technical Innovation, the right arm of Innovation?

Technical innovation demands serious innovation, but you does not need to be the first to excel. Let me give you some examples here: MicroSoft was not the first company who worked on PC based operating systems; Oracle was not the company invented Relational Database technology, which as made by IBM; and google’s co-founders approached yahoo! co-founders for funding, when their search enigine was still in its infancy, while yahoo! was listed as No. 1 web portal with a built-in search engine in the world. So being innovative today does not mean you shall hold your leadership position tommrrow, and pure technical innovation may not yield business success in most cases. Taking Apple as an example, Apple was one of the very first companies who rolled out PDAs outside its Mac related PC product lines, coded as Newton in early 1990s, and it failed. Comparing to the sucess of Palm Pilot, timing was a little bit early for Newton. iPod is another new gadget Apple rolled out recetly outside its Mac related PC product lines, and it is a huge success. Apple becomes the leader in innovation again, and it is a great combination of technical innovation and business innovation. Similar google’s unparallel success is largely due to its adavanced seach engine technology and its brand new online ads model (both adsense and adwords), again google was not the inventor of that new online ads model, which as made by a search engine company acquired by yahoo!. So be innovative in your business model, your technology, your business process, your markets, your ways of communication, and your ways of services, so on and so forth

Tommrrow is another day - sorry, Tommrrow is another year, we wish all the best, to you and your business!