Innovation is taking an idea and putting into practice. Creativity is the cognitive act of generating the idea. Companies need both. Innovation is the only true source of organic growth. The world leaders in innovation will also be the world leaders in everything else.
- Every business leader I've met knows that innovation is important. But what surprises me is that they're less clear on the reasons why. Hey as chief marketing officer, you have more at stake then anyone else to drive innovation. More than the head of R & D, operations and so on. You have the most to gain and the most to lose. You are the one who has to make the compelling argument to drive innovation. Here is how to do that. Broadly speaking, innovation will drive two things in your company, your effectiveness in the marketplace and your efficiency overall in running the company.
Effectiveness drives revenue growth while efficiency drives lower cost. And of course, taken together, profits increase and so does your stock price. Well, let's start with the Market Effectiveness. Innovation will help you do the following. Create new products and services. Proctor and Gamble uses innovation methods to create new household products like Febreze as well as ways to improve existing products like their line of oral care products. Penetrate existing markets. Johnson & Johnson uses innovation to improve its' sales training programs.
And that gives it more market access. Enter new markets. A company called Bic as in Bic lighters and pens, uses innovation to enter completely new markets based on its core competency and making products with plastic. Create new market categories. Fancy Feast is a brand of cat food and it used innovation to create a completely new category called the Gourmet Cat Food segment. Cat lovers love it. Create new business models.
Companies like Uber and Airbnb are great examples of innovating new business models. That happened with innovation. Increase brand loyalty. Airlines like Delta are constantly innovating to strengthen customer loyalty through new, innovative programs. Taken together, it should be quite clear that innovation makes you a more competitive company on moldable fronts. But how can a culture of innovation help you be more efficient and lower your costs? Let me show you. First and most important is through process innovation.
Every company has tons of processes in every function in every department. Processes themselves are meant to streamline things and make them more repeatable. But there in lies the problem. Processes get stale and unwielding. Using structured innovation techniques on your processes can unlock hidden value for you and your customers. That will make you more efficient. Here are some examples. In supply chain, companies like Amazon have become best in class because of they're relentless use of innovation on how packages are delivered.
In research and development, companies like Ingersoll Rand use innovation to streamline how it develops new, patentable concepts. Even in human resources, companies like Macy's deploy innovation training programs to improve employee morale, recruiting and retention. Today's generation loves to work in a creative atmosphere. Come to think of it, (laughs) so does my generation. I'm willing to bet that generations to come will be more motivated and engaged in a culture of innovation.
So ask yourself, where does innovation need to excel in your organization? Once you decide, then go make it happen.