Last update: August 1, 2013, in this by. G.
Lafley and Ram Charan, learn how innovation helps P &
Open up new markets and stay ahead of the competition.
Innovation is the key concept of shaping the life of the enterprise, helping leaders to conceive strategic choices that were unimaginable before.
Take acquisition as an example.
Most of the reasons for cost and capital reduction are reasonable: for example, the merger of the two pharmaceutical companies and the global rationalize of overhead and operations, and the cost of combining the two sales forces with R & D laboratories.
However, you can only purchase the proceeds through the acquisition for such a long time; cost-
Control is a defensive strategy, however necessary.
Innovation enables you to look at potential acquisitions from a different perspective, not only in terms of cost, but also in terms of accelerating profitability --
Revenue growth and capacity improvement.
For example, P & G's acquisition of Gillette has enhanced its ability to innovate. Its market-Leading brands (
Like Gillette, Venus, Ole B, Dulak)
Is a platform for future innovation;
The core technologies in the fields of blade and Shaver, electronics, electro-mechanical and electric power storage strengthen P & G's future innovative technology portfolio.
Innovation also provides an advantage for entering new markets faster and deeper.
To a large extent, it is P & G's ability to regain innovation that allows it to enter developing markets, where growth is twice as fast as that of rich countries.
Innovation has put the company on the offensive.
Think about how effective series of innovators Colgate and P & G have innovated Unilever from the United States. S. oral-care market.
Companies that build a culture of innovation are growing up.
Companies without innovation are moving towards elimination. The U. S.
Domestic automakers and major companies such as Firestone, Sony and Kodak have been industry leaders and even support players.
But they are all behind because their challengers have innovated them to second place (or worse).
Drucker once said that the purpose of the enterprise is to "create customers ".
"Nokia has created 0. 2 billion customers through innovation, becoming the first in India.
By observing the unique needs of Indian customers, especially in rural areas where the majority of the population lives, it splits them in a new way and installs new features on phones related to their unique needs.
In the process, it creates a whole new value chain at the price point, bringing the company the expected gross profit margin.
Therefore, innovation creates customers by attracting new users and building stronger loyalty among existing users.
This is important in itself, but the value of innovation is far more than that.
By putting innovation at the center of the business, you can improve the numbers from top to bottom;
At the same time, you will find a better way to do things ---
More efficient, responsive, more inclusive and fun.
People want to be part of growth rather than cutting costs endlessly.
Innovation culture is fundamentally different in theory and practice from the culture that emphasizes M & A or cost reduction.
First of all, the skills, temperament and psychology of innovative leaders are completely different.
M & A leader is a transaction-oriented company.
Once a transaction is completed, he will enter the next one.
While not a creative genius, the innovation leader can effectively evoke the skills that others need to build a culture of innovation.
Cooperation is essential;
Failure is a frequent visitor.
Innovation Leaders are comfortable with uncertainty and open-minded;
They accept ideas from very different disciplines.
They organize innovation into a replicable and disciplined process.
Moreover, they have the tools and skills to discover and manage the risks inherent in innovation.
Not everyone has these attributes.
However, if we do not cultivate innovative talents, enterprises will not be able to establish an innovative culture.
The idea of innovation is covered up by myth.
One myth is that all this is about new products.
This is not necessarily the case.
Of course, new products are important, but not all.
When innovation is at the heart of the way companies do things, it not only finds innovative ways in terms of products, but also in terms of functions, logistics, business models and processes.
Processes like Dell's supply chain management, tools like Google's eye monetization, methods like Toyota's global production system, practices like Wal-Mart --
Wal-Mart's inventory management, Google's use of mathematics to change games in the media and communications industries, and even to change Starbucks's re-imagination of coffee shops ---
These are games.
The same is true of Alfred Sloan's corporate structure, which has made GM the world's leading car company for decades, as has P & G's brand management model.
Another myth is that genius like Chester Floyd Carlson will innovate.
Inventor of photocopy)
Or Leonardo da Vinci: throw some money on the oddball in the R & D lab and hope something will happen. This is wrong.
Only when a lonely genius or small team is metaphorical (or actual)
The garage leads to a destructive sense of resignation;
It is fatal to the creation of innovative enterprises.
Of course, genius exists. of course, they can contribute. line-
Invention of bending (
See Steve Jobs, Steven).
But wait for the company of "Eureka!
"The moment of waiting is likely to die.
Remember that while da Vinci designed a flying machine, it could not be made with the technology available at the time.
Real innovation is important for now, not centuries later.
Another genius, Thomas Edison, had the right idea: "I don't want to invent anything that doesn't sell.
He told his colleagues that perhaps his most important invention ---
"We can't be like German professors who have been studying bees all their lives," he said . ".
It is important to generate ideas, but unless there is a repeatable process that translates inspiration into financial performance, it makes no sense.
To be successful, enterprises need to see not special innovations that only special talents can do, but that they can use the ability of ordinary people to become routine and orderly innovations. Especially those considered by Peter Drucker as knowledge workers.
Because your results today are rewarded, it's easy to delay because the organization doesn't seem to support or value innovation because you don't know where to find ideas, because innovation is risky, or because it is not easy to measure.
But these are excuses, not reasons.
We have observed and practiced innovation, a process that all leaders can use and continue to improve.
It is wider, involves more people, can happen more things, easier to manage and predict than most people think.
But making innovation a regular necessity.
In real life, great or beautiful ideas don't work seamlessly from silos to silos.
No, from the moment someone designs a solution or a product, its market trip (or oblivion)
It is the question of establishing contact again and again.
Managing these interactions is key to building innovative organizations.
Innovation is a social process in this book.
Only when people do simple and profound things can this process happen ---
Share questions, opportunities, and learning.
In other words, anyone can innovate, but no one can actually innovate alone.
As a leader, when you understand this, you can map, systematize, manage, measure and improve this social process to generate a steady stream of innovation ---
Innovation is not a mysterious act,
This is a journey that can be planned over and over again.
It takes time and stable leadership and all the changes from budget and strategy to capital allocation and promotion.
This definitely requires putting customers in front and center and opening up the R & D process to external sources, including competitors.
But this can be done.
No, this is another myth: Size doesn't matter.
Big companies like P & G, Best Buy, GE, Honeywell, DuPont and HP, and smaller companies like my father's shoe stores in India, can all achieve innovation.
I clearly remember how we used to sit on the roof, get a little relief from the heat of the night, and talk about how to do better.
In 1948, when I was 9 years old, we changed the shoe game of Hapur, the town we lived in.
Although we don't have a deep understanding of the brand-
In fact, we have never used the word brand. -
We named a row of shoes "Mahaveer "(After my cousin)
And target "rich" mainly related to India's second largest food exchange.
We convinced manufacturers to produce a special shoe collection for this target audience and to be number one in town in less than two years.
The profit from this innovation has funded my formal education in India.
From the Book of the game
Change: How do you drive revenue and profit growth through innovationG.
The former state-owned enterprises of refuli and Ramcharan; April 2008; $27. 50US/$32. 00CAN; 978-0-307-38173-6A. G.
Lafley, chairman and CEO of P & G, has been recognized as one of the most respected companies in the world and a great developer of business leaders. A. G.
In 2006, he was named CEO of the year by CEO magazine and served on the board of directors of GE and Dell.
For the first time, he had the opportunity to run a business in the Navy, responsible for the retail and service operations of 10,000 Navy and Marine Corps personnel and their families.
After graduating from the Navy, he went to Harvard Business School and joined P & G after graduation.
He start as an a brand in 1977 was appointed for president assistant of joy in June 20 year 00.
Ram Charan is the author or co-author of many best-selling books, including what the CEO wants you to know and execute.
For more than 40 years, he has worked behind the scenes of Fortune 100 companies such as GE, Bank of America, DuPont, Thomson finance, and Honeywell and Home Depot have helped executives develop and implement strategic plans and practice their business acumen.
His article is published in Fortune and Harvard Business Review, and his other books include things that customers want you to know about, boards at work, and leadership pipelines. www. ram-charan. com www. acumenlearning.