When you want you trying to grow your business, you can't do the same things big companies do, and honestly, you shouldn't want to. Just dropping money on marketing or hiring people with fancy degrees will not solve your problems. That's what big companies do, and they have huge budgets, move slowly, and often can afford to be inefficient.
A small business (or startup) focused on growth is an entirely different type of organization than a big company. Big companies are operating proven business models with proven products/services and communication. Sure, they launch new products and flirt with new business models, but they go about it much slower and more efficiently than small businesses can afford to. When a small business is pursuing growth, they are looking for ways to create more value for customers by improving their business model, products/services, and communication.
We are now touching on one of the most important parts of unlocking growth in your business. In order to drive significant growth, your business needs to become a search organization looking for ways to create, deliver and capture value more effectively. Once you master the value cycle, you stop being a search organization and shift into being a management organization operating your well-designed value cycle.
A business is not its product or service. So many great companies are built around what they sell, but the product or service isn't the business. The business is the machine that makes producing, selling, delivering and supporting the product/service possible. Once you have a great product or service that people want, then you build a machine around it that helps you effectively and constantly create, deliver and capture value. This is an important differentiation because in order to drive growth, we have to address the whole business. It's easy to focus on a product or service, but the growth you experience is the result of the business you build, not just the product or service you offer.
Innovation isn't only technology, it's also technique. What innovation does is increase the productivity of resources. This is easy to see in technology; for instance, compare the record player to the iPod. A thousand songs in your pocket or a vinyl album in one hand and a record player in the other. When technology companies make things more efficient, fast, and simple for end users, they increase resource productivity and create value.
Innovations in technique are sometimes harder to recognize, but are no less powerful. Walmart rose to world domination through the processes they built to manage a vast supply chain and thousands of stores. Sam Walton, the founder of Walmart, was obsessed with increasing productivity and efficiency in every part of his business from the beginning. His first technique innovation was rethinking how discount retailing worked. For instance, he targeted rural communities when everyone else was targeting cities. He replicated this approach to technique innovation in every part of his business throughout his career. He was committed to creating as much value for customers as he could. Think about the Walmart greeters; Sam Walton was all over that.
The way that entrepreneurs create value is by increasing the value-producing ability of existing resources, and that is what we call innovation. The goal of innovation in your business has to be to create more value. As we work through the framework remember you are searching for innovative ways to create, deliver and capture more value throughout your entire business. Thats what we call master the value cycle.
If you can create, deliver and capture more value than your competitors, then you will become the leader in your market.
Entrepreneurs see changes in their industry and the world around them as good things because their goal is to do something different. They look for change in the world around them and see it as an opportunity for innovation. The most successful companies usually start around an innovative solution to an emerging problem or opportunity created by technological or societal change.
In the words of Peter Drucker, one of the greatest business thought leaders of all time, "the entrepreneur always searches for change, responds to it, and exploits it as an opportunity."
Change kills lots of businesses over time, but only if they refuse to adapt. Change is inevitable, so your business has to practice responding to change. If you view this change as an opportunity for growth then you turn a threat into an advantage.
Think through the changes in your industry and market. Have you tried to ignore them, or have you embraced them and looked for ways to exploit them? When significant change happens around you, it usually means there is an opportunity for innovation.
Here are some examples of how innovation and change created significant opportunities:
Tesla wasn't the first electric car company, in fact, much of the pioneering of electric cars was done by another company nearly a decade earlier. What allowed Tesla to take off where the other company failed was a combination of innovation and social change. Climate insecurity and growing sustainability efforts created more consumers that wanted to ditch gas cars in favor of electric. Alongside the social change, innovation in battery technology finally moved electric car range and charge times into the range of adaptability for the average driver. Tesla created an innovative solution to societal change.
In-n-out burger was one of the original burger joints when fast food began to take off in southern California. They built an empire on quality, great-tasting food, and fresh ingredients delivered to each store daily. The societal change was the demand for fast food, and In-n-outs innovation was their controlled expansion model and fresh food delivery system.
CDBaby was started by Derek Sivers because independent musicians didn't have a way to sell their music online. People wanted to buy their music over the internet, which left independent musicians out in the cold. CDBaby solved the problem and became the number-one site in the world to buy music from independent artists. The innovation was using existing technology to sell CDs for a growing niche community. The change that created that opportunity was the industry and market shift to buying and selling music over the internet.
When you want you trying to grow your business, you can't do the same things big companies do, and honestly, you shouldn't want to. Just dropping money on marketing or hiring people with fancy degrees will not solve your problems. That's what big companies do, and they have huge budgets, move slowly, and often can afford to be inefficient.
A small business (or startup) focused on growth is an entirely different type of organization than a big company. Big companies are operating proven business models with proven products/services and communication. Sure, they launch new products and flirt with new business models, but they go about it much slower and more efficiently than small businesses can afford to. When a small business is pursuing growth, they are looking for ways to create more value for customers by improving their business model, products/services, and communication.
We are now touching on one of the most important parts of unlocking growth in your business. In order to drive significant growth, your business needs to become a search organization looking for ways to create, deliver and capture value more effectively. Once you master the value cycle, you stop being a search organization and shift into being a management organization operating your well-designed value cycle.
A business is not its product or service. So many great companies are built around what they sell, but the product or service isn't the business. The business is the machine that makes producing, selling, delivering and supporting the product/service possible. Once you have a great product or service that people want, then you build a machine around it that helps you effectively and constantly create, deliver and capture value. This is an important differentiation because in order to drive growth, we have to address the whole business. It's easy to focus on a product or service, but the growth you experience is the result of the business you build, not just the product or service you offer.
Innovation isn't only technology, it's also technique. What innovation does is increase the productivity of resources. This is easy to see in technology; for instance, compare the record player to the iPod. A thousand songs in your pocket or a vinyl album in one hand and a record player in the other. When technology companies make things more efficient, fast, and simple for end users, they increase resource productivity and create value.
Innovations in technique are sometimes harder to recognize, but are no less powerful. Walmart rose to world domination through the processes they built to manage a vast supply chain and thousands of stores. Sam Walton, the founder of Walmart, was obsessed with increasing productivity and efficiency in every part of his business from the beginning. His first technique innovation was rethinking how discount retailing worked. For instance, he targeted rural communities when everyone else was targeting cities. He replicated this approach to technique innovation in every part of his business throughout his career. He was committed to creating as much value for customers as he could. Think about the Walmart greeters; Sam Walton was all over that.
The way that entrepreneurs create value is by increasing the value-producing ability of existing resources, and that is what we call innovation. The goal of innovation in your business has to be to create more value. As we work through the framework remember you are searching for innovative ways to create, deliver and capture more value throughout your entire business. Thats what we call master the value cycle.
If you can create, deliver and capture more value than your competitors, then you will become the leader in your market.
Entrepreneurs see changes in their industry and the world around them as good things because their goal is to do something different. They look for change in the world around them and see it as an opportunity for innovation. The most successful companies usually start around an innovative solution to an emerging problem or opportunity created by technological or societal change.
In the words of Peter Drucker, one of the greatest business thought leaders of all time, "the entrepreneur always searches for change, responds to it, and exploits it as an opportunity."
Change kills lots of businesses over time, but only if they refuse to adapt. Change is inevitable, so your business has to practice responding to change. If you view this change as an opportunity for growth then you turn a threat into an advantage.
Think through the changes in your industry and market. Have you tried to ignore them, or have you embraced them and looked for ways to exploit them? When significant change happens around you, it usually means there is an opportunity for innovation.
Here are some examples of how innovation and change created significant opportunities:
Tesla wasn't the first electric car company, in fact, much of the pioneering of electric cars was done by another company nearly a decade earlier. What allowed Tesla to take off where the other company failed was a combination of innovation and social change. Climate insecurity and growing sustainability efforts created more consumers that wanted to ditch gas cars in favor of electric. Alongside the social change, innovation in battery technology finally moved electric car range and charge times into the range of adaptability for the average driver. Tesla created an innovative solution to societal change.
In-n-out burger was one of the original burger joints when fast food began to take off in southern California. They built an empire on quality, great-tasting food, and fresh ingredients delivered to each store daily. The societal change was the demand for fast food, and In-n-outs innovation was their controlled expansion model and fresh food delivery system.
CDBaby was started by Derek Sivers because independent musicians didn't have a way to sell their music online. People wanted to buy their music over the internet, which left independent musicians out in the cold. CDBaby solved the problem and became the number-one site in the world to buy music from independent artists. The innovation was using existing technology to sell CDs for a growing niche community. The change that created that opportunity was the industry and market shift to buying and selling music over the internet.