The difference between innovation and invention is that innovation improves upon something that already exists. Once the wheel was invented, it didn’t need to be re-invented — just improved through subsequent innovation. To ensure the relevance of your business, you don’t need to reinvent the proverbial wheel, but you do need to make innovation a priority.
Examples of companies that have innovated on a massive scale, successfully disrupting their respective industry’s status quo, include Uber in the transportation industry and Warby Parker in the retail industry.
Unlike traditional taxi and car services, Uber users can request a car, receive an estimated wait time, pay for their ride, track the journey and rate the driver, all through the company’s smartphone app. While other companies in the industry fight to regain market share, and as regulations increase, Uber will be forced to innovate and strategize faster than ever. Only time will tell if the company’s technology advancements, including in the area of self-driving cars, will pay off.
Warby Parker, meanwhile, has turned traditional brick-and-mortar retail on its head. This retailer is almost purely e-commerce-based. Its few brick-and-mortar locations are solely meant for customers to try on a product for size, after which they will order the product online. Warby Parker even offers an option for customers to choose several pairs of glasses to be delivered to their home, free of charge, for a trial period.
The company has avoided many of the traditional costs facing retailers, including real-estate costs of leasing a storefront, construction costs of building out stores, training costs for store employees, and so on.
Staying at the edge of innovation
But is that model sustainable? Having started with a similar business model to Warby Parker’s, men’s clothing company Bonobos has since ventured into brick-and-mortar retail, through a partnership with Nordstrom. Will Warby Parker be forced into a traditional retail business model, or will it continue to innovate fast enough to enjoy the success of its unique concept? Once again, only time will tell.
Innovation is a vital part of your business’s growth and success. While it can take your company to previously unexpected levels, it can also hinder your chances of success if ideas are not employed properly, especially if your competitors take notice and learn from your mistakes. Employees can be a useful source of innovative ideas; no one knows your business better than the people making your products or delivering your services. Encouraging suggestions for improvement from all levels of your staff can not only help your business strategy, but can also improve company culture, creating a collaborative environment where all voices are heard.
Regardless of where the ideas originate, it is imperative that your business continue to develop new ideas, to improve, to grow, and especially, to innovate.
Kevin Ryan, CPA, and Mark S. Carrow, CPA, MS, are members of Citrin Cooperman’s Philadelphia office, which provides tax services, business consulting advice, valuation services, and merger and acquisition guidance. www.citrincooperman.com. Contact them at firstname.lastname@example.org and email@example.com.