Innovation: Sensible or Whimsical?

By Steven E. Sacks, CPA, CGMA, ABC

There’s an onslaught of new gadgetry for the most basic of human actions and many of them can be done by voice commands or done remotely. Turning lights on and off and adjusting thermostats are only two of many examples. Amazon has its Echo device to just about replace people doing the most basic of things. You can wear devices to tell you about your heart rate, steps walked, quality of your sleeping patterns. You can even read a newspaper or text or do the crossword puzzle in your own car that is being driven for you.

Wow! Less we need to do for ourselves and more to be done for us. It’s certainly a “new normal.”

In business, human resource departments don’t have to sift through resumes; they have software employing artificial intelligence to preselect candidates based on algorithms that reflect desired characteristics.

Many, if not most, things in the future will have inter-connectivity, so we won’t have to worry if we are low on milk or eggs; it will be delivered to our door at the press of a button. Or if we are driving in a traffic-congested city, we’ll be notified when a parking space on a street has opened up and where it is located.

We are in the era of perpetual innovation.

Impact on Business

Certain sectors, particularly heavy manufacturing, know they must build and integrate innovation into their existing systems and processes. If the current administration in Washington is pushing for five-percent growth on GDP, the 2.6 percent growth in 2017 as reported by the Bureau of Economic Analysis will just not cut it.

It’s evident that corporate America is moving away from the mindset of slow and continuous or steady growth. “Innovate, innovate, innovate!” is the rallying cry. What you considered a good year last year may have you teetering on the edge of existence this year.

So, what’s a company to do?

First, think about your competition. It does not matter in what industry or service sector you operate. What are others doing or implementing that is giving them an edge? Increasing levels of profitability and market share mean not only matching the competition, but surpassing it. Maybe it is hiring and retention. Maybe it’s new approaches to business development. Maybe it’s more and better media coverage.

We can look back just over 20 years when there was a major milestone in the concept of innovation. In 1997, Apple unveiled its tagline, “Think different.” Despite its grammatical deficiency, it turbocharged the company, which had only 90 days of cash remaining. Apple’s immediate thought was something had to be done not only to save the company but also have it viewed by the public with a fresh, new attitude.

Apple not only changed the playing field, it eliminated the rules and models of the game. However, there were times the lines were blurred between innovation and modification, irrespective of the industry. A simple tweak here and there can result in significant change but does not necessarily reflect true innovation. But, that’s okay. By using one’s own experiences and observations, a minor adjustment can result in a significant improvement.

There are times, however, when the public is not made aware of a change, and who wants surprises? Like anything else involving innovation or some type of change, it has to be communicated, explained and justified.

Justification is crucial. Change for change’s sake is meaningless, expensive and dangerous. You may face arguments among your brain trust as to whether a change will reap rewards, but this comes only after defining what is meant by change. Is it a repackaging of an existing product to produce an emotional response (positive, hopefully) or is it a meaningful change that enables customers to see how the product or service can be leveraged more effectively for their own needs?

Innovation, or more insightful thinking, is not a nebulous concept. And it does have to be an OMG moment. How about automatically including a universal remote with a new television, or when you become a new cable service customer?  What about twist-off wine corks, or two-sided sticky notes that use static electricity?

Of course, one person’s innovation is another person’s inconvenience. Take the case with the iPhone 7. It was purposefully produced without a headphone jack. It resulted in customers needing to buy Lightning or Bluetooth headphones. Apple’s thinking: removing the jack would free up space for more and better technology, and as an ancillary benefit, those other headphones would offer a better listening experience (and an increased revenue stream for headphone manufacturers).

Are Customer Needs Considered?

This is the make-or-break challenge. There are some basic philosophies to employ when thinking about innovation. Sometimes, I wonder what a company was thinking when it made something more inconvenient or aggravating. One of my biggest bugaboos is an update on my smartphone. If something was working fine and now there is an increased battery drain or loss of synchronization between devices, this is not innovation, and arguably, it’s not an improvement. If it ain’t broke…

Tamper-proof packaging is another area. I get it when it involves medicine. Is it necessary, however, to twist, puncture and peel off a foil seal from coffee flavoring or ketchup bottles? Or spring water bottles where the plastic two-part top seem to have been welded to the bottle? More inconvenience for the customer, and surely more costs for the manufacturer. Is there a clear winner here?

Companies tout customer focus. Does every claim about customer focus ring true? Are companies’ actions really done with the customer in mind? Do they really understand customer values and desires? The real focus may instead be on managing manufacturing costs coupled with misguided ideas about customer needs.

Speaking of customer needs, shouldn’t companies determine customer needs through surveys or focus groups or any other mechanism for timely and reliable feedback? It would be useful to have a “wish list” compiled and then prioritized so as not to waste time on needless efforts.

Flexibility and Practicality

If the goal is to truly be innovative, then flexibility and practicality are necessary components. At the same time, there should be the avoidance of being devoted to one way of accomplishing change that satisfies the needs of just a small population. Moreover, when developing ideas and solutions, consider ways that allow for mid-stream modifications.

New business concepts introduced through the years were initially thought to be impractical.  However, combining two diametrically opposite ideas can really produce a winning formula. For instance, consider the concept of just-in-time inventory management, a practice companies have employed for decades to reduce costs and eliminate waste. Measure this against the normal thinking that if a product is not available to a customer, the customer is gone forever. On the other hand,  this approach to inventory management reduces carrying costs and drives companies to consider how to manufacture and ship more efficiently to salvage the customer relationship. Don’t forget that incentives can be tossed in to solidify this relationship.

Fast forward today to Amazon. It recently announced a two-hour grocery delivery service for Prime members in several cities. The test will be to efficiently pack items, especially those that need to be kept frozen, and deliver them promptly in suburban areas, where simply hopping into a car to pick out fresh produce to one’s liking is still a preferred way of shopping. Will just one screw up lose the customer? Let’s see in a year if this creates a win-win.

Companies need to understand that ideas should not be created in a vacuum.

Companies that want to follow the Apple approach need to listen to their people. Besides being employees, they are also consumers. Their observations about product or service innovation, enhancements and improvements are to be embraced. Go further and seek feedback from your vendors and suppliers, among other parties. There’s lot of talk about building a culture of innovation. Well, this means encouraging ideas and experimenting on them. This will engender employee support and enthusiasm. If something fails, learn from it and encourage more experimentation. Adherence to this practice results in successful companies and satisfied (and loyal) customers.


About Steve

Steven Sacks is the CEO of Solutions to Results, LLC, a consultancy that specializes in helping individuals, firms and organizations meet the challenges of communicating with clarity and purpose. Visit his website at