Being a leader in business requires you to keep a constant pulse on the newest advancements. With vendors, franchisees, employees, friends and customers regularly bringing new ideas and wish list items my way, I find myself in a continual state of evaluation. One of the single greatest challenges in leading a company is assessing risk while balancing the need to keep up with the current trends and consumer demands in your industry. This delicate balance is one that if done incorrectly, can leave you spending crucial funds on initiatives that impede your ability to turn a profit.
In my career, I have worked for companies that trailblaze innovation in their industry and I have also worked in roles where the fundamentals of a core offering drive the company’s success. As an emerging brand, I would argue that you don’t always have to be first in line when it comes to innovation. Perhaps, you just have to be the best in line.
Hear me out. I recognize the advantages of being first-to-market with something that no one else has. Consumer curiosity propels your profit as they experience something new and exciting. Many business leaders want to be the first, but what happens if what you just spent countless dollars and time on becomes a fad? Will the months of consumer curiosity be enough to keep your business afloat for years to come?
There’s a great book by Adam Morgan titled Eating the Big Fish: How Challenger Brands Can Compete Against Brand Leaders. He writes about how a smaller, challenger brand can steal customers away from large competitors with bigger budgets by focusing on the basics and doing what the competition is doing, only better. I am a fan of this mentality and work every day to see that this rings true in my challenger brand. Doing this while keeping a strategic eye on where and when to innovate can serve you well. When it is time to step outside the box, here are a few pointers.
Determine the fit.
I am going to cite Morgan’s book once more because one of the credos he gives to challenger brands is to build an identity that they can stick to. This is the first step toward smart innovation. He explains: “A lighthouse brand is one that has a very clear sense of where it stands, and why it stands there. This sense of self is built on rock.” It’s easy to chase something shiny and exciting, but you need to use your brand as your north star. Ask yourself whether this new product, service or operational change is something that fits in the core of who you are. If it’s a significant change to your identity, be very careful. There is a reason that McDonalds hasn’t started selling vitamin shakes out of their drive thrus.
Do your due diligence.
Before you sign up for what could be short-term success, make sure you have done your due diligence. Establish a framework for the evaluation of innovative opportunities. In that framework, identify the worst-case scenarios. What could go wrong? Make a list and a resolution plan for everything. If you are prepared to pivot quickly, you’re mitigating the risk that your innovation may bring to your business.
Start small and get buy-in.
Don’t put all your eggs in one basket. Tread carefully as you introduce something new to your business. If you are running a multi-location brand, get in the habit of running proof of concepts, pilots and phased rollouts. Make sure your team is onboard and recognizes the implementation and contingency plans.
Without innovation, your business can stay stagnant. Without carefully approaching innovation, your business could lose profit. Make a wrong move, and your company may not be here tomorrow. Make the right one, at the right time, and you could turn into the brand everyone is chasing after.