Utilizing Innovation to Grow Sales & Profits

With the future looking a little less rosy given the turmoil in the credit markets which is impacting all levels of housing, the beginnings of a slowdown in the light commercial project market, Herm Isenstein’s 2008 electrical economic outlook (previewed in the July issue of EW), marketplace competitiveness and the continued usage of no-name products to secure business, it appears that the ride may be over and that different approaches to growth should be considered.

Moving forward, keys to expanding revenues, market share and profitability will focus on improved productivity and utilization of innovation techniques to identify opportunities.

New product and market segments are unveiling themselves – LEDs, energy efficiency, private labeling, “green” initiatives, security, and more. Some companies are adding services to penetrate specific markets rather than expanding geographically while others seek new ways to manage their business and price materials.

A recent article on Automation.com by Jim Pinto, noted futurist, talks about the need for innovation to maintain competitiveness. In the article, Jim notes some of the keys to innovation:

In the new, fast-moving global environment Innovation is the key to generating continued growth and success.

Clearly, for the vast majority of companies, innovation is not just limited to disruptive technology changes. It includes improvements of all products, services and support mechanisms, infrastructure, manufacturing and production, marketing & sales channels, and delivery logistics.

Innovation is not just the occasional “eureka” flash – it includes the PROCESS of making improvements: generating new ideas, methods, devices and procedures that yield major cost or value shifts. In the organizational context, innovation is linked to performance and growth through improvements in efficiency, productivity, quality, competitive positioning, market share, etc.

Innovation may also have a negative or destructive effect as new developments change old organizational structures and practices. The innovation process often stems from completely new thinking which many people cannot embrace.

Organizations that do not innovate effectively will be destroyed by those that do. Consider what happened to yesteryear’s giants like Westinghouse, RCA and Western Union; they fizzled and withered away with antiquated products and services.

More than ever, an organization’s success depends on its ability to remain a global innovation leader. The global race to develop cheaper-faster-better products and services demands sustained innovation. Serious decline will result for those who base their plans on yesterday’s paradigms.

Study your own company’s innovation processes and you’ll get clues about your own future growth and success.

(Note: if you are in the automation industry, you should check out Jim’s automation blogs, especially his one on Rockwell.)

Companies that embrace innovation will gain a competitive advantage through the continuous development of market differentiators.

Which companies do you think are electrical industry innovators? What does your company do that is innovative? Do you feel that innovation can be a differentiator or will most electrical industry players wait for others to lead?