Innovation is the fuel that drives any business forward. In fact, one could argue that it drives the goliath machine that is the business world as a whole. Innovation begets new products, new businesses, new opportunities, and even more innovation, allowing continued growth. But sometimes, a company gets a foothold in an industry, and they cling to it doggedly, despite innovations happening all around them.
And this isn’t just an error that many smaller companies suffer from. It’s one that has plagued multi-billion dollar companies and driven them to bankruptcy. Here are just a few examples of great companies that failed to innovate and ended up losing out because of it.
Blockbuster used to be a household name. But now, mention it to anyone under the age of twelve, and you’re likely to get some confused looks. Though the video rental chain adapted just fine when the world transitioned from VHS to DVD, they failed to adapt to the next big innovations in the industry.
Netflix began offering DVDs via mail. Redbox offered movies for $1 per night at convenient vending machines. Then came video on demand and streaming services. And through it all, Blockbuster remained stagnant. Now, the company that once led the video rental industry has closed all physical locations and has become a footnote on Dish packages.
For decades, Kodak led the pack in innovation for the photography industry. They created the Brownie camera, Kodachrome color film, the handheld video camera, and the easy-load Instamatic camera. But when digital photography began to take hold of the industry, Kodak lost their edge. Afraid that following this innovation would cut into their main money make—camera film rolls—they held their ground and hoped digital photography would be a passing fad.
Of course, we know now that they were dead wrong. In missing out on digital photography, Kodak also missed out on a number of other major innovations in the industry—file sharing software, digital photo printers, and so on. Now, they’re stock is 96% below where it was in 1997, and there’s no sign of them making a comeback.
You would think that the company to produce the first ever mobile phone would be a shining example of innovation. And, for many years, that’s what they were. In fact, as recently as 2003, Motorola was at the top of the cellphone industry, when it introduced the Razr—at the time, it was the best-selling mobile phone ever made.
But then smartphones hit the market, and Motorola failed to adapt to this shift. Very quickly, they were pushed out of the very market they had created by bigger innovators, like Apple, LG, and Samsung. While they have rapidly caught up to the changes in the industry, they are now chasing the pack instead of leading it.
So What Went Wrong?
Looking at these stories, you might begin to wonder where these businesses could have changed. What could they have done to prevent the hard fall from household name to has-been? Obviously, keeping up with industry innovations is the key, but how could they have done it? And more importantly, how can you avoid becoming like these three businesses?
To put it simply, you must always be searching for innovative ideas from a number of sources. Relying on your product development team or other specialists alone isn’t enough. You should always be gathering ideas from your entire team of employees, your competitors, your current customers, and even your target demographic at large to help guide you in making innovative decisions. By gathering this information and managing it with idea management software, you can remain ahead of the game instead of becoming a thing of the past like Motorola, Kodak, and Blockbuster.