One of the drags on the US economy is the dismal growth in jobs. There are many arguments about the fiscal and monetary policies that need to change to improve job growth. I will not enter that debate in this blog. I will talk about something that is more important to growth than any governmental policy, innovation. I have two examples to illustrate my point.
- Pinkberry: Frozen yogurt is about as mundane as you can get. Yet, a young entrepreneur and her partner from Los Angeles saw an opportunity and decided to go for it. It has been wildly successful. From one location in a less-than-desirable area of LA they have grown to 91 stores across the US. Even during this period of economic slowdown the chain continues to grow, just recently opening a store close to my home in Charlotte (so much for the diet). The yogurt is not cheap (works out to the equivalent of $68 per pound for some flavors) but it is great. Pinkberry has created a very loyal customer base. This company has continued to grow even during the tough economy of the past few years.
- Ford: Yes, Ford! This auto company reinvented itself without the help of TARP. Alan Mulally was named CEO in 2006. Besides a major cost-cutting effort, he mortgaged the company to the hilt to be prepared for an economic downturn and he initiated a major new product development effort. The result has been some award winning cars and trucks that are selling well. For example, the F-150, Mustang, and redesigned Taurus have sold very well. Aside from building cars that were far better quality than in the past, the company innovated with its use of electronic technology. They focused on making it easier to use your phone or PDA with the vehicle thus making for a safer driving experience. Stockholders have been rewarded with an increase in price from $1.58 in February 2009 to $12.77 currently.
Does innovation work? It does in most every market in which we work. The innovation does not have to be “big;” often, customers are just as interested in the seemingly small innovations as much as the big breakthroughs. The most important question is make sure the innovation is something customers really want and not what the innovators want customers to have. For more ideas on how to enhance innovation in your organization, visit our website and download our white paper entitled “A Framework for Rethinking Growth” (note: registration required). I think you will find it helpful. Let me know what you think.