Reinvention. Innovation. Product extensions. To a business owner, these topics have a certain sex appeal that’s hard to resist. Pursuing the new and the different is fun. Staying the course and just executing is boring and ho-hum. But, struggling companies often feel they must quickly and significantly change their entire business or be overtaken by new upstarts.1
Other times, companies feel compelled to innovate or reinvent when they sense that their advantage in the market is being undermined by their competitors. But a recent study at the Harvard Business School found that very successful companies do not reinvent themselves through periodic strategic transformations. Instead, they continue to build upon what makes them better than their competitors. Its what I call focused innovation.
So, before you start down the road of innovation — creating new products or services or entering new markets — get crystal clear on how your company serves your core customer better and more profitably than the competition. Then get even better at it by focusing your innovation on that advantage. Otherwise, all these new ideas become distractions that make your business more complicated without a corresponding increase in profits.
If you want help defining what makes your company unique, I have a one page exercise that many businesses have found valuable in documenting their uniqueness. Email me at firstname.lastname@example.org and I will send you a copy.
1The Great Repeatable Business Model–By Chris Zook and James Allen