Posts Tagged innovation

In our last post, we talked about the importance of being innovative, but this does not come without the risk of being ridiculed or looking a little different to peers. Howard Schwartz, CEO of Starbucks could have simply given into popular opinion or “type A” personalities with his coffee bar idea, but thankfully he didn’t. That brings us to our next point which is cashing in on the “NOs” of the corporate world. In the corporate world, the bigger the wheel, the slower it turns, if at all.

Companies are full of ideas, especially large ones. They promote themselves as being innovative, but often fail to innovate. I worked for a pretty large nonprofit one time, after I had suffered some health issues and had to close down my own small business. Ideas got shot down fairly quickly there, and it did not take me long to stop mentioning any of them again. It was simply a waste of time. The company was as old as dirt and things were not going to change any time soon or not at all. Coming from my small business background where there was no red tape wrapped around innovation, this was hard to take to say the least. I left on my 1 year anniversary there and what a happy day it was. If you find yourself working in the corporate world, don’t let your dreams and ideas die there.

In fact, the corporate world is a great place to look for a “No” that can be turned into a “Yes.” Corporations as a whole run from risk and potential failure. No manager wants to risk acting on something that sounds different in these economic times and even if they did, they know it would get voted down. In the 1970s, a large importer and distributor in the United States thought that importing bottled water was a very bad business decision. After all, who would pay for water that they could just get at home or who would drink water with bubbles in it? I am sure that they are not the only company that felt this way. Now, all grocery stores, convenience stores and even vending machines stock water by such companies as Perrier, Evian, Pellegrino, Dasani, and Zepyrhills. I guess the idea worked after all. Wouldn’t you say?

So, if you find yourself working in a big corporation, keep your ears opened while you are talking by the company water cooler because you just might hear the next million dollar idea.

Another example of an innovation in an industry by a company that refused to conduct business as usual is the Seattle based company, Starbucks. Starbucks was founded in 1971 by three partners with a focus on selling high-quality coffee beans and equipment. This focus eventually shifted to supplying customers with coffee-based drinks and small food items. This slight shift in business has allowed Starbucks to turn into the world’s coffee house. They went from one store that started in the early 70s to 16,635 stores that are spread out over 49 countries, but this growth did not come without opposition within the company.  After a trip to Italy, Howard Schwartz, who served as the Director of Retail Operations and Marketing,  suggested selling drinks in a coffee bar environment. To many, coffee was to be served at home and there just wasn’t money in being a coffee bar. It took selling the company to Schwartz in 1987, before Starbucks focused on launching their coffee bar phenomenon.

Starbucks has reinvented the coffee business. We all know that they didn’t create it. But take a look at other famous businesses, and take note of how they have set themselves as the “go to” source in their industry. Ebay certainly did not create auctions. Paypal didn’t start online commerce. ESPN didn’t invent sports, Microsoft didn’t invent computers. Nike didn’t invent shoes. Xerox didn’t invent copiers. Google didn’t invent the first search engine, and the list goes on and on.

As they say, hindsight is 20/20. But take note, when innovation shows up, it may not be wrapped as you would like it to be, and it may not look like what you thought that it would look like but whatever you do, do not despise it. It may be the greatest thing since Starbucks.

Time has moved on and small business has too. Since the dawn of time, man has worked on ways to simply make life better in every way possible. By nature, he is an innovator and a creator. When it comes to business, he is no different. Companies justify their business by the ideas and innovations that they bring to the market place. If they don’t, they will simply cease to exist.

While I was growing up, I was a big fan of stores like K-Mart and Murphy Mart, a local competitor to K-Mart. My parents and family liked taking advantage of those Blue Light Specials that offered various items at discount prices that K-Mart ran. For those not familiar with K-Mart’s Blue Light Specials, let me give you a quick explanation. During your shopping adventure in your local K-Mart, you would hear an overhead announcement that would tell you about a great in-store special that they were about to run for a limited time. The way that you would find the special was to find the flashing Blue Light. Now, the Blue Light was not hard to find because it was atop a large cart and the Blue Light flashed nonstop, and it did create quite a thrill for bargain shoppers. These Blue Light Specials could occur at any given moment. So, you can see why shopping at K-Mart was such an adventure. K-Mart sure did know their market or did they?

Along came Walmart (notice the resemblance in the name), and they absolutely crushed K-Mart and any store like them in a fairly short amount of time. Walmart played the marketing game quite differently than K-Mart. They went after the vendors and manufacturers and negotiated down all the prices that they would pay for items. By doing this, who needed Blue Light Specials when, the entire Walmart store was always on special? In other words, everything at Walmart was cheaper than K-mart and you did not need to wait for a special sale or event to get a great deal. Not only did they offer great deals, but at a Super Walmart, they offered groceries in addition to all the department store items in just one convenient location. That was convenience at a whole new level and the typical busy American absolutely loved it.

Certainly, purchasing groceries and department store items was not a new concept, but Walmart changed how both department stores and grocery stores did business. With the marketing approach that Walmart took, they completely differentiated themselves from all other stores. By doing this, they created a multi-billion dollar publicly traded company. Now, you may not be out to create a multi-billion dollar company, but if you want to make a very good living with your thriving business, you must continue to stay innovative. Dare to do things differently and refuse to do business the same way everybody does in your industry. It will make you money now and will help extend the life of your small business. Remember, K-Mart was innovative sometime ago but where are they today? Continue to do business differently!