Innovation here, innovation there, innovation everywhere. Nowadays, everyone seems to embrace it as the ultimate gospel in our capitalist world. The word innovation is so trendy, most of us get the impression that innovation is a necessity for a company to survive. In fact, during an interview with Apple CEO Tim Cook, he even told Bloomberg that "to not innovate is to die." If the king of innovation himself said so, it must be true, right?
The apparent answer is yes. I mean it is not difficult to find an example from recent history to prove it true. Blockbuster, Polaroid, Borders, Alta Vista, just to name a few. But the most famous example has to be Kodak. For anyone who does not know the story of Kodak, here is a little crash course. Kodak is an American company best known for its photographic film product and it dominated the market during the 80's. However, it then started to decline in the 1990 due to the fatal marketing decision to stay in the film industry rather than moving immediately into digital photography. The decline was drastic, to the point that Kodak filed for bankruptcy in January 2012.
At first sight, it does seem like the Kodak story fits the "innovate or die" statement perfectly. But at a closer look, it is more revealing than that. It is interesting to note that it was Kodak who first developped the digital camera in 1975. So what happened? In fact, Kodak fell into the "low-risk trap". Instead of investing in a disruptive technology like digital camera, Kodak chose to put the money into improving the quality of photographic film, a low-risk innovation. Adi Alon, a managing director of the Operations Innovation and Product Development Consulting Group for technology consultancy firm Accenture, stated : "Low-risk approach to innovation ... helps maintain the brand, maintain the core offering, but it doesn't result in a significant value creation. And over time, it's going to erode your market position."
"Low-risk innovation is a trap that many companies fall into," he explains. Unfortunately, the king of innovation Tim Cook and Apple itself might have just fallen victim to this trap. With its 37 versions of iPod, 23 iPhones and 16 iPads, Apple is basically making different iterations of the same technology. Adding more and more visually stunning features cannot hide the fact that Apple's growth seems to have plateaued.
Besides choosing the right innovation, to survive in the fast-paced market is also about what you do with your innovation. "More often, it's an inability to do things that have to follow innovation. It's really about getting stuff done," states Cliff Oxford, the CEO at Oxford Center for Entrepreneurs. "Getting stuff done means packaging, selling, delivering and collecting money to increase revenue and profits," he further explains. One can even argue that with an impeccable marketing strategy, one can sell anything to anyone, regardless the quality of the product.
Beats by Dre is the prime example in this case. While the quality of their products is not bad per say, Beats' headphones are often regarded as overpriced in the audio-lover community. The reason Beats electronics is able to sell their products with such high price tags is perceived value. "You've heard of Beats by Dre, and your mom and dad probably have too. But if you ask them to name another audio company, they might have some trouble unless they're audiohead ... Perceived value is really the name of the game that Beats electronics is winning," says Marques Brownlee, a Youtuber and technology reviewer.
To conclude, the statement "innovate or die" is only part of the truth. The correct statement should have been : "innovate while avoiding the low-risk approach and increase the perceived value of your innovation, or die." But who wants to put that as the title of their article. Undeniably, "innovate or die" is a powerful statement. It is simple and captivating but lacking foresight. Don't be fool by it, it is just another advertising trick to get more readers, just like I use it as the title of this article.
