Wednesday, July 26, 2017

Overdoing Innovation

Lately, it seems to me that “continuous innovation” has become one of those rallying cries that people follow without thinking about what it really means of if it’s really needed.   The notion that customers are dissatisfied with your current product offering and that you need to constantly abandon old products and adopt new products just to be fashionable is simply not true of most industries.

Chances are, your current product lines are profitable and popular.   If this were not so, the firm would be in turmoil and would not have budget to innovate.  And chances are, the majority of your customers like your products just as they are, and will not be delighted by arbitrary changes.

As a concrete example, the customer who goes to a Macdonalds restaurant and orders a Big Mac is not going to be delighted to hear that they are no longer being sold – that the company has “innovated” and is now selling stromboli instead of hamburgers because, according to their marketing firm, that’s what customers want this week.   This would be a disastrous business decision.  The Big Mac sandwich has not changed much, if at all, for decades – and customers like it just the way it is, and will probably continue to do so.

That’s not to say the brand isn’t innovative.  It seems that every month they are offering some new item to try to keep pace with the changing tastes of the market  - but they do so without disrupting their primary menu items that most customers like and expect of them.   It’s also worth observing that their main menu is very slow to change because most of the innovative items have only a temporary popularity – those that have staying power become permanent offerings.  The Big Mac itself was a new and different idea in 1967 and has not evolved – nor has it needed to evolve.

But back to the main point, there is no value in continuous innovation  unless there is a need for innovation in the first place – when a product is no longer meeting the needs of its customers (or never really did in the first place) and there is widespread discontent with all product offerings, then there is a need to innovate to find a better solution – but for most goods and services, this should be unusual if they are currently viable in the marketplace.

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