Always Be Innovating

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By Jeremy Office Special to The Pineapple We are in an environment of constant innovation. If you pick up any business magazine, you will more than likely see some sort of innovative process, idea, strategy or technology. Just like Alec Baldwin’s character told his salesmen to “always be closing” in the movie Glengarry Glen Ross, today’s companies are telling employees to “always be innovating.” No greater example of this is in the tech industry, where according to Bill Gates you must “innovate or die.” Innovation differs from invention in that innovation enhances an idea or method whereas invention is the creation of the idea or method itself. Innovation comes in three forms: incremental, complementary and disruptive. Incremental innovations are small changes, additions or improvements that are added to existing products and services to extend the longevity of their life cycle and keep them from becoming obsolete. Complementary innovations are new products or services that can add value to existing product lines without having a negative impact on existing products and services. Disruptive innovations, unlike incremental and complementary innovations, replace existing products or services by being significantly better than anything currently offered. They make existing products or services redundant and obsolete. Disruptive innovations are quickly adopted by the majority or even the entire market. An example of a disruptive innovation would be downloading music over the Internet rather than buying CDs. Innovation has played a strategic role in the success of many companies. For example, Steve Jobs did not invent the smartphone, he only enhanced the idea. He improved the quality, reliability and user experience in a way that revolutionized the smartphone industry. As we have seen with the smartphone, consumer expectations drive innovation in the market. Another great innovator of our time is Elon Musk. One of his first ventures, PayPal, has changed the way consumers do online business transactions. PayPal has now more than 150 million users and is one of most visited websites in the world. Musk’s latest project, the hyperloop, has the potential to change public transportation for everyone. His other well-known project is Tesla. Just like Steve Jobs did not invent the smartphone, Elon Musk did not invent the electric car, he only enhanced the idea. Today, Elon Musk continues to look forward in the advancement of technology and its effects on everyday life. His companies SolarCity, SpaceX, Tesla Motors and PayPal all continue to practice disruptive innovation. Innovation differentiates one product from its competition. Customers expect continually improved products that make their life easier. Modern consumers are more informed and have more options in terms of what they buy and who they buy it from than ever before. If a company cannot compete on price, it will need innovative products and ideas to make its business stand out from the competition. Innovation in a business can also be driven by the amount of innovation competitors are doing. In a highly innovative market such as smartphones, being the first to market with a new product can provide a significant advantage in terms of sales and building a customer following. The rise and fall of industry leaders can be attributed to the pace of innovation. As companies innovate, they become more competitive. One example of how innovation can shake up an industry and contribute to a company’s success is Apple’s iPhone. When Steve Jobs launched the iPhone in 2007, industry experts knew it was a game changer. It took the normal functions of a phone and enhanced the user experience in a fun and stylish, yet simple and minimalist, way. The innovative technology in the iPhone paved the way for an entirely new industry that didn’t previously exist. The mobile industry today is a multibillion dollar industry and continues to grow. Outside of business, innovation is also important to the advancement of societies around the world. New and innovative products can increase the standard of living for millions of people and provide them with opportunities to improve their lives. We see a tremendous opportunity for these products in emerging markets as breakthroughs in medicine and technology have significantly improved living standards around the world. Businesses can no longer rest on their laurels because the level of competition is so high and the advantage of being first to market it so great. As more businesses realize the importance of innovation in their industry, we believe that it will continue to play a bigger role in economic growth. That is not to say that business should be innovating just to be innovating, but that they should listen to their customers and understand their demands. Adopting an “always be innovating” mindset will not only help achieve greater good for the company, but could also revolutionize a society. Click HERE for our video. Jeremy Office, Ph.D, CFP, CIMA, MBA is Principal at Maclendon Wealth Management in Delray Beach and specializes in portfolio construction, strategic asset and liability management, and long term planning relating to financial matters as well as real estate, income tax, insurance and estate planning. He is also Managing Partner of SJO Worldwide a venture capital company. www.maclendon.com • 855.MAC.WEALTH