2007/10/27

Overlooked Benefits of Innovation

This post came out of today’s roadtrip ruminations on the topic, “If I had to chose a company to work for, how would I choose?”

Because of a current interest in and exposure to innovation, one criteria high on the list for selecting the best company is how successfully a company uses innovation to strengthen and expand their markets. Although innovation is an overused buzz word, there are benefits of innovation which are often overlooked.

Since graduating from college, I’ve worked in six different companies. Based on observations in those companies and discussions with people who worked in other companies, it seems less than half the people in American companies truly enjoy their jobs. Another way to state the above question is, “What company/job would I truly enjoy?”

There are many reasons why someone might not enjoy their job. A certain percentage of people are probably in either the wrong company or in the wrong job at their current company. Other people may not have had adequate training or been given the right resources to do their job. Some people find themselves in a bad situation with very difficult co-workers or managers. A few people can find things to complain about regardless of the situation, and they will never truly enjoy their job no matter what company they work for.

Another reason people may not enjoy their job is because the company doesn’t have a strong focus on innovation or does not have a culture or history of successful innovation. If a US company does not innovate in today’s global economy, it is likely to gradually or quickly lose sales and market share, resulting in decreased profits. Those decreased profits will be quickly followed by reduced employee benefits and job losses, as well as reduced employee morale and job enjoyment. The most innovative, capable and motivated employees are likely to seek better jobs at a different company, further reducing the company’s innovation and creativity resources.

Thinking about this situation caused me to consider some overlooked benefits of innovation. Below are a few of those overlooked benefits:
  • Innovation products have higher profit margins which allow the company to provide attractive employee benefits (a la Google's healthy free lunches and interesting Tech Talks).
  • Innovation attracts smart, motivated employees -- people who are interested in and able to effectively deal with change.
  • Innovation provides an outlet for creativity and employees' desire to make a difference.
  • Innovation successes reinforce the innovation process.
  • Innovation provides the opportunity to do new things whilst remaining at one's current company.
When working on making your company more successful, pursue both evolutionary and revolutionary innovation. If a company focuses only on evolutionary, or incremental, innovation the company will tend to stagnate. Dedicate 20% of your innovation effort toward totally new products or significant brand extensions. Companies in less mature markets will, of course, need to dedicate more than 20% of their resources to revolutionary products.

Job seekers choosing a company to work for should identify ones with a track record of innovation. A good company will also have the products, people and processes in place for future innovation. Learn as much as possible about a company before considering working for them. Tomorrow's blog post will discuss a few innovation questions to ask employees and management at your prospective future employer.

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