Successful Innovators Don’t Care About Innovation

SundheimHere is an excerpt from an article written by Doug Sundheim for Harvard Business Review and the HBR Blog Network. To read the complete article, check out the wealth of free resources, obtain subscription information, and receive HBR email alerts, please click here.

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Successful innovators care about solving interesting and important problems — innovation is merely a byproduct. If this distinction seems like hair-splitting, it isn’t. The two focuses create vastly different realities.

Focusing on innovating — as a worthy goal unto itself — tends to be born from self-centered motives: We need to protect ourselves from competitive forces. We need to ensure we have a growth engine. We need to keep up with other companies. To do all these things, we need to innovate. This is often a CYA perspective coming from an executive suite looking to protect its turf. It isn’t inherently bad. It’s just that this focus tends to create a culture where customers are on the sidelines, not in the center of the dialogue.

By contrast, focusing on solving interesting and important problems tends to be born from customer-centered motives: What’s going on with this set of customers? Where are they ecstatic? Where are they upset? Where do they feel good? Where do they hurt? How can we better serve them? These types of questions pull customer problems front-and-center and create a culture where that’s expected. And since people naturally want to solve problems, it pulls for innovation.

To illustrate, consider paint maker Sherwin-Williams, a company that has long been obsessed with solving painting contractors’ problems.

Twenty-five years ago while doing customer research, Sherwin-Williams uncovered an important insight: Contractors tend to make paint-buying decisions based more on proximity to job site than brand of paint. To them, time is money. This led to a hypothesis that saturating a market with stores to ensure there’s a store close to any job site will produce outsized market share growth. This was a new and innovative idea in a pre-Starbucks-on-every-corner world. Sherwin-Williams tested the hypothesis in four markets and it worked. But as they tried to roll it out to more markets, competitors quickly caught on. Suddenly it became a race for real estate and competitive advantage was lost.

Fast forward 20 years. During the 2009 recession, Sherwin-Williams’s competitors started shuttering stores in order to cut costs. Despite strong shareholder pushback, Sherwin-Williams did the opposite, opening 60–100 stores per year during the downturn. It was a risky bet, but they didn’t want to miss the opportunity to be close to customers when the market inevitably rebounded. When it did rebound, revenue growth far outstripped that of competitors. Sherwin-Williams’s stock price has quadrupled in the past five years.

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Here is a direct link to the complete article.

Doug Sundheim is a leadership and strategy consultant with over 20 years experience in helping leaders drive personal and organizational growth. His latest book is Taking Smart Risks: How Sharp Leaders Win When Stakes are High (McGraw-Hill, January 2013). You can follow Doug on Twitter @DougSundheim and find out more about his services at www.clarityconsulting.com.

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