Innovation among companies
We see the success that companies like P&G, Air BnB and Uber. The main lessons found in these readings is how these companies used innovation to separating themselves from the competition, not just use it to qualify but use it as a compete. Innovation is where we see companies creating separation such as the assembly line that Ford had. You can innovate by creating a new process to doing something that is already done in the company or by creating something completely new and different like Uber.
Going through these readings reminds me of the great Wayne Gretzky who once said “Skate to where the puck is going, not where it has been.” Companies need to stay ahead of the curve not just play catch up with their competitors. A key analysis for me was how creating a new product not just increases the brand for that one product like P&G who comes out with one new ground breaking product, but in turn that increases their overall brand. The same can be said on the negative side. If a new innovation or product fails miserably the entire brand will suffer. Based on my experience in banking there is high importance in innovation when trying to compete. The hype cycle has mobile banking at the plateau of productivity, before it reached this area there had to be a lot of innovation and a lot of issues came about. Taking a picture of a check to deposit was a ground breaking development as was making mobile transfers to others and payments. The readings outlined the troubles that new innovations face from the regulation, the old ways and the competition. Something that I feel could have been a bigger focus was the troubles the innovating company faces in managing the new technology and having their employees buy into it. From personal experience mobile banking has made life much easier for customers but caused many issues in the bank end for the company. A better job could have been done highlighting internal issues companies face. We had issues such as customers taking pictures of checks at bank and depositing it at same time to get double the amount of the check. Other issues that came up was too much data being used because of the mass amount of information available from the account; pdfs of statements, rewards, history of all transactions. All these had to be addressed on the fly as it was important to be fast with the innovation and roll it out before it was ready in order to compete with competitors. P&G stated they had a 15% success rate with new projects this was interesting to me because it showed that they could fail 85% of the time and still find success as a large company. Although they went out and improved on that number it was interesting to me that they were able to survive the losses and still grow. It is important to not put all your eggs in one basket, if multiple projects fail a company should still be able to move on. This is possible for a company as large as P&G but for other companies such as Uber and air bnb they couldn’t afford to fail.
Innovation is a key factor of growth but for some companies innovation and ground breaking ideas are all they have. Both Uber and Air BnB did not have time to hammer out all potential litigations and regulations when they came out with their product, they built their entire premise on first of its kind ideas. For them if their ideas failed their entire company would fail, where as other established companies like P&G could afford failure. Here we see that speed was the name of the game. The faster they brought out their ideas the bigger hold they had on the market place, many problems did arise as we see in the articles but these were fights that would be fought while growing. Uber relying on 95% word of mouth marking, making their product market for them. The obstacles the companies faced did not deter the growth of their customer base.
Some of the claims in the articles did puzzle me however, bold claims such as the end of tv and a world where we are all passengers are too broad. Although there are similarities in the fall of tv to the fall of Newspapers I don’t see them going on parallel paths. There will always be a market for live tv such as sports, I don’t foresee any world where the super bowl is only being broadcasts on an internet streaming service. Especially with new barriers coming around, in Pasadena CA, a new proposal was passed to tax customers when streaming tv such as Netflix. Governments had always relied on tax money from cable providers so while cord cutting hurt them they decided to do something about it. More and more cities are adopting this, one of the main features of online tv is the cost savings, as this gets lower we will see a decrease in cord cutting. These companies are also increasing their prices as a higher premium is being demanded by show providers and they can no longer slash prices in order to attract customers. Also most cable providers now do have mobile content making their shows available on any mobile device. I also don’t see a fleet of self-driving cars taking over the road, it will take many years for this to become even close to fruition. People still value having control and there are millions of people who have a love for vehicles for their speed and power. These people don’t drive the cars to get from point A to point B but rather for the trill and looks of it.
Innovation is a very important factor for a company to grow or in some cases begin, but the cost of innovation must also be realized, some companies can’t solely rely on innovation. It is important for a company to know how much to spend on innovation and if it can afford to have a new project fail. Finding the balance between innovation spending and keeping afloat is difficult but a must for companies to survive. Some companies must be wary to not dive to quickly into an innovative new products, others must see that it is the only way they can be viable, it is up the business heroes of each company to figure that out.