Innovation is essential to our organizations. It can be a competitive advantage. It can be used to solve problems. Innovation can even bring us efficiencies. Innovation, however, can also be risky. Especially if we are attempting to enter unknown territory while we are innovating. To effectively innovate, it is important to ensure that the innovation is familiar in one way or another.
RuckPack is a company that was recently featured on ABC's Shark Tank. Founder Rob Dyer presented his company's non-caffeinated energy "shot" and struck a deal with two investors, or "sharks" as the show calls them.
RuckPack's energy shot utilizes supplements as the primary "boost" ingredient rather than caffeine, which is the main ingredient used by their competitors. Therefore, the energy shot is extremely innovative for the space and finds demand from a large number of health-conscious customers who would prefer not to rely on caffeine.
Rob was recently interviewed on the Shark Tank Pod Cast and was discussing how he ended up in the energy drink space. He explained that when he was first thinking about what entrepreneurial endeavor to pursue, Rob took some advise from Warren Buffett. The advise was to stick to what you know.
Rob wasn't familiar with the energy drink space, but was familiar with supplements as he is a Marine, and most in the military take supplements. Therefore, Rob created a product that was based on supplements, something he knew quite well, that just happened to be in the energy drink space.
Just sticking with what you know, however, doesn't always equate to successful innovation. Take JC Penney for example. Ron Johnson had been an executive at Apple and was brought in to turn-around a flat JC Penney. His approach was to essentially turn JCP into the Apple of the retail clothing industry. He started on a campaign to eliminate sales and discounts and instead offer "everyday low prices."
Ron Johnson understood single pricing structures. He was brought up in Apple, a very successful company that rarely changes prices and never runs a sale.
The problem with implementing this best practice innovation at JCP was that JCP customer's knew sales and discounts. They did not understand everyday prices that never went down. The result? JCP experienced one of the worst one-year losses in the history of business.
Questions to Ask Yourself When Innovating
- Do you know the space you are innovating in?
- Are your customers going to be shocked by this innovation?
- What strengths do you possess that you can use to innovate with?
- Is this innovation going to be a complete learning curve or do you have existing knowledge in some areas?