A Cure for Innovation’s Quickening Clock Speed

Clayton Christensen warned that being too focused on your existing customers can lead to a myopia of innovation. That’s true for the big dogs, but technology firms often suffer from the reverse problem; they need more focus on their customers. A passionate focus on your customer base will ensure that they are predisposed to purchasing your upgrades and later offerings.

Innovation cycles have shortened over time. Companies rise and dive like spinner dolphins. Early Internet companies in the 90s (PointCast was so cool!) came and went as quickly as did early PC companies in the 80s (remember Ashton-Tate?). If you are a leading wood products company today, there is a pretty good chance that you will be a leading wood products company in 20 years. If you are a leading technology technology company today, it’s a lot less likely that you will stay in the lead for long. Today Google and Facebook look like the way of the future but I’m willing to bet that both will be weathered and fading within 6 years, crumbling before upstarts who are not yet in existence. I’m not suggesting that they are fads, or weaker than their competitors; Google and Facebook are great firms. It is simply think that the clock speed for innovation has quickened. Improved collaboration, access to information, globalization, and an increasingly entrepreneurial culture have all contributed to this.

Innovations are the sparks that drive our economy and our civilization but individually they don’t last long. Each quickly fades as another bursts into life; usually in a very different place. The hubris of many young companies is that they believe their ability to innovate is a repeatable  process. This belief was as strong within Hewlett Packard and Xerox 50 years ago as it is within today’s coolest start-ups. So what can a firm do to protect their business?

There are several ways to extend innovation; companies like GE and 3M provide possible models for this. However, I believe the easiest path to longevity is to focus on your customers. Deep customer engagement is key (yes, that’s pretty much my tag line). A company that is riding a wave of innovation can leverage it by creating deep customer relationships and a strong brand.

Customers who love and promote you will be early adopters for your next product and forgive your failures. On the consumer brand side Apple is a good example; Apple zealots are willing to spend premium money on 1.0 releases (iPad) and have been willing to quickly forget failures. We will see if the iPhones’ antenna problems are forgotten as quickly as the Apple Lisa.

If  you are selling direct with account teams, then deep penetration of the customer is the best strategy; IBM and Oracle are good models for this. If you are selling to consumers online or through channels then establishing a strong brand is essential along the lines of Procter & Gamble and GE.

Innovation is how great firms start, but great customer relationships and branding are what enable them to endure.