Monday, December 20, 2010

Continuous Innovation and Drucker's Prime Directive

You’ve probably read this quote from Peter Drucker: "The function of a business is to innovate and then market that innovation."

I call it Drucker's Prime Directive.

It means that, if you’re in business, you essentially have two functions:

1. create new products and services
2. sell them

Because this blog is about marketing, I don’t usually devote too much space to topics like innovation.

Except for today ... to say that innovation can be about as complex or simple as you make it.

Innovation can be complex if you think of it as great leaps forward … the next big, BIG idea … or "Eureka!" moments that land you on the cover of Wired.

But, innovation can be simple. Accidental, even.

For example:
  • Spencer Silver, a researcher at 3M, worked -- and failed -- to develop a strong adhesive in 1970. Four years later, Arthur Fry, another 3M employee, was annoyed by the bookmarks he placed in his church hymnal kept falling out. Recalling the work of his colleague Silver, he applied some of the weak adhesive to his bookmarks. The little "sticky notes" worked perfectly. In 1977, Post-It Notes were brought to market, quickly becoming as indispensable as staples and Scotch tape.

  • Roy J Plunkett, a DuPont research chemist, was experimenting with a coolant called TRE (tetrafluoroethylene) to establish its use for refrigeration in 1938. A cylinder of the gas failed to discharge. Instead of throwing it out, Plunkett and his assistant cut it open to investigate. They found the gas had solidified into a slippery white powder. Tests showed it to be the slipperiest substance in existence! It was also inert, with an extremely high melting point. DuPont began marketing products coated with the miracle lubricant in 1946. Millions of frying pans later, Teflon is another innovation we can't live without.

  • Richard James, an engineer, was intrigued by the spring that fell off his desk in 1940 -- it seemed to walk across the floor before coming to rest. After a few modifications and some creative selling to toy executives, the Slinky was introduced in 1948. More than 250 million have been sold worldwide.
What’s the common factor in these “accidental” innovations? They were fully exploited and brought to market by people who were paying attention.

Lesson: To innovate in business, you need an open mind AND open eyes.

Start by looking at every “Hmm, that’s odd!” moment as a potential innovation. One that you could profit enormously from.

Examples of small, odd moments that can lead to big breakthroughs for your business:
  • The customer who uses your product in a unplanned way -- and gets unexpectedly pleasant results. (Like the sailor who drank boiled down, “condensed” wine before it could be reconstituted with added water. Thus was born brandy.)

  • The product that failed but has parts worth salvaging. (Like the online game that failed to take off, but included a tool that enabled photo sharing. The developers scrapped the game and relaunched the web site as Flickr.)

  • The customers who want faster, slower, cheaper, more expensive, bigger, or smaller versions of your product. (Like the little girl who pestered her father, Edwin Land, for an instant copy of the picture he had just snapped of her in 1944. Land went on to develop the instant camera.)

  • The product that produces an unplanned result that's worth selling. (Like the drug that was initially used to treat high blood pressure and angina, but unexpectedly caused other results to pop up. The developers re-purposed the drug as Viagra.)

This -- keeping your eyes open for new ideas, however small or odd -- is innovation made simple.

It's the first half of Drucker's Prime Directive: "The function of a business is to innovate and then market that innovation."

Next time, I’ll discuss the second half: How to continuously improve your marketing of those products or services you innovate.

(More ideas like these in my Free Report, Guaranteed Marketing for Service Business Owners.)

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