Many entrepreneurs, business owners and CEOs are regularly attempting to reinvent themselves and their businesses to gain market share and a competitive advantage with varying levels of success. The size or market share of the business is not limited to small or mid-sized companies, either. We know the world looked different in 2020 and will continue to look different for the foreseeable future, but is reinventing the best path for success?
The attempt to replace Coca-Cola with a reinvented version became a case study for business schools for decades. In 1985, Coca-Cola had been losing market share to diet colas and other products for many years. In taste studies, it was discovered that consumers preferred the sweeter taste of Pepsi-Cola. Executives decided to reinvent the formulation of its product to try to meet the demands of the consumer. The backlash from loyal customers was truly seismic. Three short months later, the original formulation, Cocoa-Cola Classic, was back, and “New Coke” was gone. The lesson? Coca-Cola was a well-established brand that could have been improved upon, but reinventing it completely was a mistake.
I was on a Zoom call recently with Ron Klein. The overwhelming majority of people are familiar with some of Ron’s products but wouldn’t recognize his name. Probably the most widely used was one he received the patent for in 1966. Credit cards had existed since the early 1950s but had not become the widespread tool they are today until Ron convinced credit card companies to use the magnetic strip on the back of the card. Rather than inventing something new, Ron was an innovator. He improved on existing products to make them easier to use. This is a subtle but incredibly important distinction. How many times has your organization decided to reinvent a process or product causing a revolution when an evolution would have been the best choice?
Some of the companies that dramatically impact how we lived today did so out of innovation rather than invention. Steve Jobs, who is uniformly recognized as having a tremendous impact on how we function in our everyday lives, took items that had already existed and made them better. There was the Blackberry before the iPhone and the Walkman before the iPod. There were tablets before the iPad (including Apple’s own Newton more than 15 years earlier during Jobs’s absence from the helm of Apple). The Fitbit was before the Apple Watch. Apple products improved the existing product offerings. The same could be said for Henry Ford and the production assembly line of the automobile, or Jeff Bezos, who basically took the catalog business model (like the Sears Roebuck Catalog from the 1890s) and created a faster, more responsive and personalized way to buy products that are delivered to your doorstep.
Many businesses focus on creating the latest and greatest goods or services and lose sight of what is truly important to their customers. While companies often focus on what can be produced or created, customers really care about how they solve their problems and can make their lives simpler. The difference between an average company and a truly outstanding organization is their commitment to operational excellence. I believe the constant focus on operational excellence is created by innovation, not invention. It could be said that inventing can interfere with operational excellence by completely interrupting process improvement with process substitution. When referring to operational excellence, I am not referring to just improvement in the manufacturing of products but to improving every step of the process that delivers the ultimate customer experience.
Innovation isn’t as glamorous as creating something completely new, but it is the constant vehicle of improvement that can be your competitive advantage. We can actually confuse innovation with invention because it can literally change entire industries or, in the case of Apple or Amazon (as well as many others), change the landscape of the world.
When you look at your business today, what three innovations could your team focus their attention on that would significantly impact your customer’s experience and your operational excellence? If, as an organization, you consistently focus on three innovations to improve operational excellence, over a period of time, some of your customers will believe that you have reinvented your company, but all it really took was innovation.
Garry coaches business owners, executives and high-performance teams as CEO and Managing Director of Compass Business Coaching. This report was first published in Forbe.