American businesses, like their global counterparts, find themselves in a highly competitive business environment, in which they compete with companies both around the corner and—all too often—around the world.
In the space of only two decades, almost every aspect of conducting business has changed or evolved; for example, being a ‘retailer’ used to imply that a company would open its doors every morning, and lock them at sunset. In 2018, the very concept of retailing has been completely reworked—with eCommerce transforming customer expectations and the tools (and personnel) required to succeed.
Yet, amid all the business transformation resulting from technology and the advent of the Internet, one ingredient required for business success has remained unchanged: innovation.
Apple’s iPhone: An Innovation Icon
Just how critically important is promoting innovation in order to attain business success? Well, in 2016, Apple Inc. reported 92 percent of total operating profits from the world’s top smart phone companies—in just one business quarter. In other words, the company’s seemingly omnipresent iPhone—arguably one of its most important innovations over the last 20 years—grew to such importance that it allowed Apple to dwarf virtually all of its smart phone competitors.
Ironically, many familiar with the world of business agree that attaining the level of enormous success–and industry dominance–enjoyed by such business titans as Apple (or Google, or Amazon) can often inhibit—rather than encourage—innovation.
Despite Apple’s phenomenal financial success—with a current market capitalization of approximately $824 billion—some analysts have complained that in recent years, Apple has not been encouraging and promoting innovation that first produced its enormously popular iPhone, more than a decade ago.
Still, the fact remains that Apple’s innovative smart phone has helped spur the company to its stratospheric financial success; nearby ‘neighboring’ Silicon Valley companies that have also risen to dominate their respective industries—including Google and Facebook—can also attribute much of their international success to promoting innovation in their products and services. These companies have transformed the way business is conducted in an increasingly competitive business environment.
In Search of Business Innovation: Location Matters
In search for the ‘magic recipe’ for promoting innovation to survive a competitive business environment, a recent study by the University of California, Riverside, found that it’s not just coincidence that many of the world’s most innovative—and successful—businesses appear to emanate from similar geographic locations.
According to the university’s study, the state of California—home to Apple, Google, Facebook and dozens of other companies leading the way in business innovation—is able to foster a business environment that is “conducive to product innovation thanks to the interplay of both demand and supply-side factors”.
According to the study, California’s success as an ‘incubator’ for innovative businesses can, in large part, be attributed to the cooperation and alignment of three key players required to foster technological business innovation: academia, industry and government.
The of U of C study found that “none of the three factors, on their own, is as important as the fusion of all three”; in fact, the study likened the importance of the cooperation between academia, industry and government in promoting technological business innovation to the absolute necessity of “soil, water and sunlight” required for plant growth.
The UC study examined approximately 66,000 private companies active in the medical device industry between 1987 and 2014.
Interestingly, based on an analysis of the study’s results, researchers found that the five most innovative states for medical devices were: California, New York, Massachusetts, Illinois, and Texas.
The common thread linking these five ‘hotbeds’ of innovation in the field of medical devices was found by the UC study to be a “blend of venture capital, National Institute for Health (NIH) grants, and research universities.”
Moving Beyond Location: Universal Methods for Promoting Innovation
While the UC study confirms that certain geographic locations may provide advantages that promote business technology innovation, it’s critically important to remember that there are actions that individual businesses can take in order to ensure that their companies remain innovative within their respective industries.
A recent survey of the Entrepreneurs Organization (EO) shared their members’ thoughts on actions that any business can—and should—take to promote innovation within their respective organization.
These suggestions for promoting innovation in a competitive business environment include:
- “Rearranging seats.” — Citing the belief that digital marketing is a “team sport”, EO members said that promoting a team-like environment is useful in developing new ideas; the analogy used was to that of a ‘family eating dinner’, wherein promoting an exchange of ideas by the ‘right people’, sitting in the ‘right seats’, will naturally lead to an exchange of innovative business ideas.
- “Don’t fear mistakes.” — While it is never a good idea to promote ‘reckless behavior’ in business, innovation requires that employees feel empowered to work beyond their respective comfort zones. Analyzing mistakes made in these endeavors can, in fact, provide a framework to developing innovative ideas.
- “Bring an idea to the table.” — Encourage employees to offer up at least “one way in which they’ve made themselves 1 percent better at doing their job, or a technique for enhancing their end result”; new ideas, based on successful methods, and innovation are often directly related.
- “Stop, start or keep doing the same.” — To help promote innovation, ask each employee to identify one thing they would ‘start, stop and keep doing’ if they were running the company. The answers to those questions can help to highlight innovative ideas that may have otherwise been overlooked if employees were not urged to share them with others.
- “Utilize technology to promote interaction between employees.” — A growing number of companies rely upon remote employees, and that can be problematic in fostering an exchange of ideas. Fortunately, there are many technological advances that allow even remote employees to interact on a regular basis with on-site staff, thereby fostering an exchange of innovative ideas and suggestions.
- “Be willing to devote time for innovation.” — Business schedules are usually jam-packed with meetings, travel, projects and a multitude of items all requiring attention; all too often, lost in the shuffle of a busy business day is time for looking ‘outside the box’ of daily duties, and exploring new ideas. Setting aside time that is—specifically designated—for developing innovative concepts is one way to ensure that innovation is (literally) a part of an organization’s business plans.
From Benjamin Franklin to Thomas Edison to Steve Jobs, great American innovators have transformed both the way individuals interact, and the methods by which businesses complete their transactions; even in a world of global competition, successful American companies will continue to rely on their unique, innovative products and services to help them survive an increasingly competitive business environment and delineate themselves from competitors—be they around the corner, or around the world.