When you have just started a Company, you have no option but be innovative. The challenge is staying innovative when you have some money. Cultivating an innovation culture where your product portfolio favors long-term innovation is one of the ways to ensure sustainable innovation. If you do not adopt this, you risk becoming like this Kodak; they were incredibly successful with film, had one of their engineers invent the digital camera yet they became complacent. Why? Their culture did not support innovation and their product portfolio structure was based on survival rather than innovation.
If you are going to innovate in the short and long term you need a consistent innovative product portfolio structure to help you do that and a supporting culture. Google, IBM and Apple are consistently innovative because they have the product portfolio dived into three categories to favor cash flow inflows and drive innovation simultaneously;
Bread & Butter: These are the products or services that are bringing in the biggest percentage of revenues into the Company at the moment. Every innovative company needs this product or service because innovation funding sometimes takes years to bring returns yet to need cash to operate. This set of products or service can change or evolve. Case in point, Google had Adwords as their bread and butter at one point. As of 2017 their B&B was Android (a mobile operating system developed by Google, based on a modified version of the Linux kernel and other open source software and designed primarily for touchscreen mobile devices such as smartphones and tablets). Innovative Companies need a second category or products or services;
Consulting products or services: These are products or services characterized by giving expert advice to people working in a professional or technical field. Such products or services take a long term to develop, they have high margins and command market leadership. Disney sales consulting services in Customer care after years of perfecting care at their parks. Another example is Tesla which licenses it electric car technology to the likes of Benz,Audi etc. What have you done so well over a long period of time? That is a clue on developing your consulting arm. You also need a third category;
Out- of- the- box: This is the experimentation zone where you test things that you would never have thought about ever doing. For Google, it was them going into going into self-driving cars. I mean we know you for data, we know you bought YouTube, yet you invest into self-driving cars. At Sudesh Int’l Consult we are experimenting with dance and swimming as out-of-the-box experiments. What experiments can you carry out to give you a wide set of possibilities?
All the above categories need to be operational for you to innovate in the short and long term. Please note that the categories will need your time and intentional investment of time. If you are interested in beating the odds all the time embrace this wisdom and see your Company stay relevant while making lots of profit.
Credit: Sudesh Kaka.