Tuesday, May 15, 2007

Innovation, Change and Ego

InformationWeek has some observations on innovation.
Down To Business: Who's In For Innovation? No, Who's Really In? Everyone's pro-innovation in theory, but because it can be disruptive and cost gobs of money, innovation wends its way into most organizations slowly.

At last week's Software 2007 power powwow, Salesforce.com chief Marc Benioff was one of the industry leaders talking up innovation. "The biggest untold story is we're going through the biggest renaissance in software," Benioff told InformationWeek's Mary Hayes Weier. "More innovation is happening now than in the last 10 years. Walk around this conference and you'll be amazed at what you see.

"Which gets us back to the innovation dichotomy. Everyone's for it in theory, and CIOs like Carter are devout practitioners, but because it costs money, in terms of budget dollars and disruption, innovation wends its way into most organizations slowly. It's especially hard for the biggest tech users and vendors. At Software 2007, after dismissing the McKinsey-Sand Hill finding that customers don't think large software companies are as innovative as smaller ones, SAP CEO Hasso Plattner acknowledged that his company's SaaS product plans, also revealed at the conference, are a year or two late. Then, to almost underscore the research findings, Plattner blamed the delay on SAP's need to meet Wall Street expectations and on "internal controversy." But innovation must march on, Plattner said: "The only advice I can give is, don't wait too long."

This is true of every business. I gave up my software company when the money chase vs technology cycle out ran me. It was a great idea. It's remnants sit in boxes in a storage locker. Along the way, I learned that one cannot wait to innovate. My experience and that of all around me showed that being slow to innovate cost money, talent and market opportunities.

Today's WSJ (paid area) has an interesting article on how innovation need not be totally new. How sometimes "Everything Old Is New Again" even in home milk delivery.

Small Dairies Profit From a Resurgence Of Home Deliveries
Firms That Held Out In Tough Times See Payoff in Higher Sales
Returning to your doorstep: the milkman

As American consumers rush toward healthier, home-grown foods, the old-fashioned trade of home milk delivery is making a comeback in pockets around the country. And that appetite for wholesome fare, coupled with rising gas prices, is giving an unexpected marketing boost to some tiny dairies and local milk distributors, helping them compete against larger rivals who saturate store shelves.At Crescent Ridge, Mr. Parrish says getting the average ticket order up has been key. And one of his best tools is the Web -- where customers can tweak their orders up until midnight on the day of delivery. Today, some 25% of customers order online, and the average Web order is 20% higher than non-Web orders. The company says it's investing $40,000 to overhaul and upgrade its Web site in the next six months.One of the dairy's newest challenges is figuring out how many products to sell. Having a large selection of items other than its own dairy products, such as macaroni and cheese, meat, and bagels, has boosted the average sale to between $20 and $25. It also helped the company compete when online grocery delivery companies, such as Peapod of Skokie, Ill., launched a grocery delivery service in its area.

The biggest disaster in home delivery of groceries was WebVan. Peapod and others were an outgrowth of the traditional store delivery business. WebVan was a pure Internet delivery business with sole purpose warehouses and delivery vans. There were a lot of people who made money. Even more lost money in the endeavour. The failure was not the product of lack of innovation. The failure was a direct result of too much success and not enough examination of that success. Too many egos got in the way or too many economic realities. We learn must from failure. We learn very little from success. When those who were successful in one arena come to another the presumption is that they possess the ski ls and discipline necessary as well as that both arenas and conditions are identical. That almost never happens. Things are different and the smart businessman reacts and responds to changed conditions. WebVan had some very smart people. They recruited some very successful people. They mistook raising capital with rising sales. They over built, over extended, under marketed and never got the customer base necessary to overcome their high costs.

The cycle looks to repeat itself in many ways. The short time from success to failure to innovation should allow the living memory of people to apply lessons learned the hard way. The Internet spurs innovation but it forces us to change the timing of our innovation and examination of mistakes and search for opportunities in the wreckage.

How fast do we learn the lessons of the Past? (Success and Failures?)

How do we apply them to opportunities that are only possibilities in the Present?

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