Innovation

- [Narrator] Successful companies such as Starbucks and Apple are masters of innovation. Starbuck's success is based not only on the quality of its coffee, it also expanded by marketing itself as a purveyor of choices and products and environment. Starbucks offers dozens of sizes and combinations of coffee, it gives consumers a place to hang out and relax. Apple for its part boasts a high innovation IQ. Before Apple launched the iPod in 2001, no consumer felt compelled to own a little plastic box that could hold 1,500 songs. A few years later, the iPod is ubiquitous. Both companies embraced Drucker's concept of forgetting about yesterday and embracing tomorrow. Innovation demands the willingness to take risks and the boldness and confidence to cut ties to your previous successes. The Drucker approach suggests developing crucial habits to raise your innovation IQ. First, drop the old to make room for the new. Most companies stubbornly cling to the products and strategies that worked in the past. The best marketers understand that they must clear out stale products and ideas. Innovation requires the wise deployment of human capital. Second, systematically seek opportunities. Creative new products get hatched because someone actively searches for opportunity. Demographic changes offer one opportunity as does the emergence of new knowledge and information. Other opportunities come from inefficiencies in a business process or market, or gaps between what customers want and what is available. The third habit is use a disciplined process to turn ideas into products. Brainstorming is crucial in the creative process. Listening is the most important part of brainstorming. Once you have ideas, pursue them, don't be afraid to chase ambitious projects, but be certain to match an idea for example, a pink cell phone, with an opportunity, in this case, consumers desire to express individual style. Innovation isn't a onetime process. Today, an innovative product will soon spawn similar products from your competitors. Federal Express learned in the 1970s that its initial innovation, express package delivery, couldn't keep competitors at bay. It's success encouraged other organizations to offer similar services. FedEx had to continue innovating to keep its lead.