Sticking to the known best-practices and markets may be the quickest path to irrelevance when it comes to designing and building new products and mapping out corporate direction.
At least, that was the premise of Adam Hartung, managing partner of Spark Partners, a consulting firm specializing in innovation, during his presentation at the Electronic Component Industry Association (ECIA) executive meeting in Chicago this week.
"If you are irrelevant, you are a failure," said Hartung to an audience of supply chain professionals. "When you are relevant, your customers can't wait for a sales call, they want to know your point of view."
He pointed to one-time retail giant Sears and once market-defining Eastman Kodak as two examples of once powerful companies now waning in influence. He also offered a handful of product examples: encyclopedias, maps, and wristwatches. These once mainstream products have nearly gone the way of the dodo bird.
Avoiding the irrelevance trap takes a combination of creativity and fearlessness that challenge the average manufacturer. Fortunately, Hartung offered a four-step process for capturing success:
- Spend time looking at the future. Rather than planning based on past markets and customers, the key is to focus on future trends. Instead of looking at the biggest present day accounts of the organization, for example, ask where the greatest opportunity lies. Look for the thing that is different, but that makes money and gives people what they want. Think Virgin Airlines, which tossed out the hub and spoke system of traditional airlines and delivered cheap fares, along with more legroom and personal video screens for every passenger, moving the company away from its music business roots.
- Focus on competitors rather than customers. Consulting present customers about new directions can lead to industry lock in, Hartung warned. Newspapers, for example, listened to customers who still wanted classified ads, but failed to consider the online options like Craigslist that made their approach obsolete.
- Don't be afraid of being disruptive. It's tempting to stick to what you know, but sometimes you have to go in entirely new directions to succeed."It's one thing to have the insight, but you actually have to do it," said Hartung. If Amazon had feared being disruptive, they'd still be just an online bookseller.
- Create white space projects and teams. Innovation won't happen in your spare time. You have to dedicate people to figuring out directions and solutions, Hartung emphasized. Give the team parameters (goal, budget, and timeframe), set them free, and see what happen.
This handful of guidelines provides the secret sauce of innovation success, Hartung promised. "It works every single time," he said. "We haven't seen a single example of organization's following this pattern that don't revenue double in three to four years. When you align with the market you are the one that makes shifts happen."
The electronics industry is facing a variety of market shifts, and the reality is that most organizations must change or die. How do you see these principals being applied in your organization? What do you think the future of the supply chain holds?