1. Innovative Strategy for Survival.
Innovation: “Innovation is crucial to the continuing success of any”
Strategy: “A plan of action designed to achieve a long-term or overall aim”.
The innovative organisation
Why Innovation?
Today, business is nothing less than war and victory is ephemeral. Sustaining a position
in the consumers mind is an on-going battle and victory can be snatched away with the blink
of an eye. The continuous battle for the top spot has forced companies to constantly innovate.
Very few companies are successful in sustaining their dominant position and those that are,
continuously innovating. They have the courage to attack their own position in the market.
Continuous innovation and self-attack are at the core of competitive strategy for the 21st
century companies. In the book of "Marketing Warfare" say that the best way to improve a
company's position is to constantly attack it. They feel that a company can keep strengthening
its position by introducing new products. To put it more precisely, a moving target is harder
to hit than a static one.
Innovation, for the new breed of companies, is all about changing the environment. It is
about breaking the old rules and routinized work pattern and introducing new things with
new standards. It means creating a sea change in the way a consumer performs his day-to-day
activities. Example: ATM-"the ATM was an innovation which totally changed the way
people used to deal with their money".
The general life cycle of any product which all companies go through has four phases:
1. Introduction of the product,
2. Growth,
3. Maturity,
4. Decline.

2. Now, if the life cycle is same for all, how is it possible for some companies to have a
competitive edge over the others? The basic difference here is, in the case of general
companies, they don’t push their products in the market, by introducing them when the earlier
one has reached its maturity stage. They introduce the new ones when they are in the decline
stage or almost out of the market. Thus they give their competitors the chance to attack their
products. But in the case of successful companies; they tend to work on the new modified
versions at the time the basic version is introduced in the market. And come up with
them when their earlier ones are reaching or touching the maturity stage (according to the
market demand). Thus they give no chance at all to their competitors to attack them. This is
the basic difference between the general and successful companies, the difference of
continuous innovation and the fearless nature of attacking themselves which gives them a
huge competitive edge with respect to their competitors, and further which helps them in
retaining, regaining and sustaining their No. 1 position.
Most marketing experts agree that a company needs to continuously innovate and attack
itself to be a consistent performer. According to Paul Greenberg (Greenberg), President of the
56 Group, LLC and the author of "CRM at the Speed of Light: Essential Customer Strategies
for the 21st Century", companies need a proactive (self-attack) effort to succeed in today's
business world.
Willem P Burgers (Burgers), Professor of strategy and Marketing, China Europe
International Business School, (CEIBS) Shanghai, China, too feels the same. He says, "The
pace of change has accelerated enormously. Thus the right approach is to attack and destroy
yourself before somebody else does. While attacking yourself may not bring success to you
always i.e., you may have to sacrifice your short-term profits but it will benefit the company
in the long run by giving stability and prosperity".
The only thing companies should remember here is that they should have the courage in
them to attack themselves repeatedly and not to be afraid of small failures, because these
failures will be the pillars of success for them in the long run. Professor Burgers adds, "Self-
attack means a constant renovation and re-examination of your products and processes. It is
important not to be afraid of making these attacks and spending money to make these
dramatic and incremental changes."

3. Masters of Innovation
Companies which are masters in this game of self-attack and innovation have been able to
achieve and retain their position year after year irrespective of changed circumstances.
1. Example: “GILLETTE”
The first name in innovation and self-attack is of Gillette, a $9 bn global producer of
personal care and grooming products. Gillette firmly believes in continuous product
innovation. It has always stuck to its corporate mantra of "innovation is Gillette". It has got
the knack of continuously attacking its own products. Its history proves it. From Sensor to
Mach3, Gillette kept on innovating and attacking its own products. It revolutionized the wet
shaving market throughout the world as there has been a continuous evolution in Gillette's
product line since its inception
2. Example: “IBM”
The next popular player in this game is IBM, which from its very inception has been
introducing new lines of mainframe computers with a significant price performance
advantage over its existing products. It has never hesitated or missed out the chance to crush
its competitors whenever the situation demanded. It earned the reputation of `irreplaceable'
with its strategy of continuous innovation and self-attack in its competitive struggle with
Dell, HP, Apple and many more companies in order to achieve its present position. It seems
to adhere to the golden rule of the business that says, “If you fail to crush your competitor or
leave him, it will crush you back. So never ever fail to crush your competitor whenever the
situation arises or demands so”.
3. Example: “SONY”
Another example of successful innovation is Sony. It always kept its focus on its core
business of consumer electronics, but at the same time constantly kept introducing
breakthrough products and new models even if they were hurting the sales of its existing
products.

4. Then of course is the classic story of Microsoft. Microsoft is one of the most spectacular
innovative success stories in today's business scenario. Nevertheless, organizations such as
Walt Disney, 3M, Intel, SMH, Johnson & Johnson, GE, Rolls Royce, P&G, Mc Donald's etc.,
have mastered the art of creating consistent and sustainable positions year after year
irrespective of different circumstances by continuously renovating and attacking themselves.
A number of companies in India also, who are market leaders in their respective
industries and maintain a dominant position in the market place, have embraced these
strategies. The first among these is the name of Hero Honda, the No.1 two-wheeler company
in India and also the largest selling motorbike company of the world. Hero knew the
importance of change and continuous innovation and attacked itself with better and new
products, without any fear of failure. The history and line-up of its products reflect this. Other
successful innovative companies include VIP, Bajaj, Tata, Mahindra, flipkart, Amul, to name
a few.
All these companies have mastered the art of consistently generating revenues and doing
better than all other competitors, i.e., they knew how to create the demand for new products
and grow revenues even in recessionary times.
Meaning of innovation
Innovation organisations first know what “innovation” means. They know that
innovation is not science or technology, but value. They know that it is not something that
takes place within an organisation but a change outside. The measure of innovation is the
impact on the environment. Innovation in a business enterprise must therefore always be
market focus. Innovation that is product focused is likely to produce “miracles of technology”
but disappointing rewards.

5. The Dynamics of Innovation
Innovating businesses are aware of the dynamics of innovation. They know that
innovation follows probability distribution that it is possible to say what kind of innovation, if
successfully brought about, is likely to become major product or process, a major new
business, a major new market.
1. The innovation prone
It is heuristic guide based on economic vulnerability of a process, a technology, or an
industry.
Example: An industry with only one software product, which all over the world has enjoyed
rapidly expanding consumer demands –“FACEBOOK/WHATSAPP”.
2. Demographical developments
Another area of innovative opportunity is the exploitation of consequences of events that
have already happened but have not yet had their economic impacts. Demographic
developments i.e. changes in population, changes in knowledge, changes in awareness,
changes in vision, changes in people’s expectation.
Example: the pharmaceutical industry, its success largely because it anticipated the impact of
fundamental changes in awareness- “MANKIND”.
3. Change not exploit
Finally, there are innovations which are not part of the pattern, the innovation that are
unexpected and that change the world rather than exploit it. They are the innovations in
which an entrepreneur set out to make something happen that are truly important innovations.
Example: henry ford, who envisioned something that did not exist at that time but, he make it
happen-“V8 ENGINE”, “MASS MARKETING”.

6. The risk of failure
A strategy for innovation has to be based on the clear acceptance of the risk of failure and of
the perhaps more dangerous risk of “near-success”. A fair number of innovative efforts end
up in a near success rather than in success or failure and near success can be more dangerous
than failure.
There is again and again product or process that was involved with the expectation that would
“revolutionize” the industry only to have it become a minor addition to the product line,
neither enough of failure to be abandoned nor enough of success to make difference.
It is as important to when to abandon an innovative effort as it is to know which one to start.
Why Companies Fail to Retain their Position
There are a few great names in today's business world, which are there in business but
probably not in their favourite position. The story for them would have been entirely
different; if they had not resisted change and more importantly had they not ignored the
importance of innovation in business. The first in this list is Coca-Cola (one of the world's
strongest brands) the more-than-100-years-old soft drink first started as a patent medicine but
later developed into a regular drink. Coca-Cola in its early days was a monopoly in soft
drinks market. This resulted in complacency for the company. It failed to act on the changing
taste of customers and seemed to have forgotten that to be the leader in this business it must
innovate and not just deliver the same products year after year. Coca-Cola missed out the
biggest opportunity to block Pepsi (or any other competitor at that point of time) by not
introducing a second brand of a different (sweeter) taste. Though Coca-Cola later tried to
come up with new versions, it was too late. And so it paid the price for its overconfidence and
relaxed attitude by losing its monopoly. Its market share also reduced drastically. Though, it's
true that Pepsi is still second to Coca-Cola, the important point here is that it is the closest
competitor in this war.
Next is the story of Nike, one of the major companies in sportswear. In the late 1990s,
Nike's sales jumped by 140%, net profits rose by 40% and the stock prices by 320%. All
these would have been a dream for any company. But it's true, Nike achieved all this. But it
failed to sustain its position because of its resistance to change! It failed to identify the

7. changing trend in the teenagers' choice from traditional athletic shoes to the casual leather
shoes. This attitude of Nike resulted in the dramatic fall of its market share in the medium
and low priced shoes. It forgot that winners have to achieve both growth and efficiency at the
same time.
The late Sumantra Ghoshal of the London Business School had once said, `Winners are
like chefs, they must learn how to cook sweet and sour". Unfortunately, Nike didn't.
Undoubtedly, it had the talent and capability to grow big very fast and bounce back to its
classic standard, but it failed to do so again and again because of its resistance to innovate,
self-attack and inability to learn from mistakes.
The innovative attitude
The resistance to change – resistance to change in grounded in ignorance and in fear
of unknown. Change has to be seen as opportunity by the people and then there will be no
fear. Top management in innovative organisation, therefore, not only “encourages” ideas, as
all management are told to do. Top management in the innovative organisation is the major
“drive” for innovation. It uses the ideas of the organisation as stimuli to its own vision and
then it works to make ideas a concern of the entire organisation.
The innovative organisation requires the learning atmosphere throughout the entire
business.it create and maintain continuous learning. No one is allowed to consider himself
“finished” at any time. Learning is the continuing process for all the members of the
organisation .
Attack or Get Attacked
Companies today must operate at a much faster pace (proactive) than their
competitors in order to have a real competitive edge over them. They should be faster
in developing and introducing products, implementing strategies and responding to
the changing customer needs and wants.
Companies like Gillette, Walt Disney, 3M or Hero Honda all survived because
they evolved, innovated and attacked themselves from time to time, i.e., they
transformed according to the changing priorities of their customers. They all have in

8. them the ability to focus on the future rather than dwell in the past, which is so crucial
for success in this global environment.
Going back to the theory of Charles Darwin “Survival of the fittest” in this
context, "You have to evolve and transform according to the changing times. If you
don't you won't survive". Just think how important and contextual this is for today's
companies. The message is simple and loud: the faster the companies evolve the
better for them, if they don't there will be no tomorrow for them. The choice is theirs.
Structure for innovation
The search for innovation needs to be organised separately and outside of the on-
going managerial business. Innovative organisations realise that one cannot simultaneously
create the new and the take care of what one already has. They realise that maintenance of
present business is far too big a task for the people in it to have much time for creating the
new, the different business of tomorrow. They also realise that taking care of tomorrow is far
too big and difficult a task to be diluted with the concern for today. Both tasks have to done
but they are different.
Innovative organisation therefore, put the new into separate organisational
components concerned with the creation of new.
The oldest example is probably the development department at E.I. du Pont de
Nemours in Wilmington, founded in early twenties. This unit is concerned exclusively with
the making of tomorrow. It is not a research department – du Pont has a separate big research
lab. The job of the development department is to develop new businesses; production,
finance, and marketing, are as much its concern as technology, product, and processes.3M,
too, has setup a separate business development lab in parallel with, but separate from, its
research lab.

9. Innovation as “business”
The innovative organization realise that innovation needs from the beginning to be
organised as a “business” rather than as “function” in concrete terms, this means setting aside
the traditional time sequence in which “research” come first, followed by “development”,
followed by “manufacturing” with “marketing” at the very end the innovative organisations
consider these functional skill as part of one and the same process, the process of developing
the new business. When and how each of these tools is to be put into play is decided by the
logic of the situation rather than any preconceived time sequence.