Stirring the pot should be a part of a company’s ongoing revitalization plan. One of the worst hackneyed clichés is, “If it ain’t broke, don’t fix it.” If this is your way of doing business, then it is a good bet that it’s just a matter of time until you discover a chink in your armor. It may start as a hardly noticeable, minuscule crack in the underlying facade of your strategy, manifesting itself as a minor issue with an inquiring customer asking when you will do this or that. You, however, can be sure that this slight whisper will build to a proverbial shout. Like it or not, you’re doing business and competing in an age where existing and prospective customers sometimes have access to information even before you. This includes quickly discovering the first inkling of the “new best thing” that the next Elon Musk-type has cooking in the garage. And that just might be a breakthrough sparking a meaningful innovation in your industry.
Customer loyalty today is based on a “What have you done for me lately?” mentality. It’s mandatory that your employees be on a constant vigil for how to improve. For customers to be loyal to you, they have to know that you’re always advancing and on the prowl for how to do it better. To be an innovator, you have to devote time, effort and money to perpetual research and development. R&D is not just for tech companies but also for companies that plan to be around tomorrow. Even the smallest businesses have to be on the lookout for anything that can do it better. In most companies, the real threat is inertia, which leads to complacency from within, as well as customer boredom from the same old product even if it’s working. When each side of an ongoing relationship starts taking one another for granted, it’s just a matter of time before bigger problems begin to percolate.
Too frequently, money is tight for small and big companies alike, and the bean counters are quick to give R&D expenses an evil eye. Unfortunately, and even understandably, new versions of a good old standby are usually the first cut when sales slow, and banks start tightening lending covenants. The justification is typically that innovation needs to be put on hold because there is no immediate return on the investment.
The bigger question for the CEO is, “Are these types of expenses nice or necessary?” I vehemently would argue it’s the latter. As a matter of course, companies continuously introduce advanced versions of their bestselling products to keep a cash cow fresh and compelling. It’s about creating a degree of planned obsolescence to ensure that a product doesn’t become commoditized and to promote FOMO (fear of missing out). As soon as that happens, a company’s trophy product could be knocked off and the price cut. Make sure you schedule pot stirring sessions, ask questions of your team and make it their charge to dig for even the most elusive answers. This leads to innovation, followed by creating elasticity for your products because you’ll have found a way to improve your widgets. It could be a unique style change or a dynamic cost matrix that encourages customers to buy more. In turn, this can increase demand for the current version. To do otherwise, companies run the big risk of being victims of their own initial success.
This is the heart of capitalism. So, if it ain’t broke, make sure to schedule breaking it.
Visit Michael Feuer’s website www.TipsFromTheTop.info to learn more about his columns, watch videos and purchase his books, “The Benevolent Dictator” and “Tips From The Top.”
