The Innovation of Others Can Be Your Gain

Change can be scary.

Change can be especially scary when you’re not the one who is instigating the change.

Throughout history, there have been many instances when a new idea was broadcasted, and the creator subsequently vilified as a disruptor of the status quo. These disruptors are met with resistance from the public and organizations who want to slow down or even outlaw the change. Instead, these organizations should view innovations for what they are – a sign that change is needed and an opportunity for them to improve.

A Call for Change

It’s hard to look objectively at your operations, harder yet your entire industry, and realize that you are meeting less and less of your customers’ needs. It’s easier to rally outrage around a new idea. Essentially, it’s hard to call “BS” on yourself in time to make the changes necessary to correct course before your company or industry no longer exists.

When a new, innovative service appears on the horizon, such as Uber, Airbnb, or Bitcoin, companies in the respective industry should realize these changes are happening for a reason. They are letting down customers. Innovators are seizing that opportunity – and their market share.

Past Examples

Auto Industry – Back in the late ‘70s and early ‘80s when Japanese automobiles entered the US market, US automakers lobbied Congress to pass tariffs on foreign automobiles to protect their bottom line. Instead, US automakers should have acknowledged why US customers were buying Japanese automobiles and then quickly adapted to meet this evolving need. In the end, US automakers were forced to play catch up when their lobbying efforts were unsuccessful in slowing the influx of Japanese automobiles into the US.

Music Piracy – In the mid-90s, the price of a CD was around $12-18, when the phenomenon of music piracy arrived. With the digitization and compression of music, file sharing applications such as Gnutella, Napster, and LimeWire allowed peer-to-peer sharing of files. Within a few years, the issue of music piracy was a hot topic. It was labeled as theft, and music companies started suing their fans. The music companies didn’t see was that people were unhappy with the current way of buying and sharing music. What’s more, they didn’t see was that Radiohead’s album, Kid-A, reached the top of the charts thanks to file sharing. They didn’t see the opportunities.

How to Make the Change

Anytime a company sees an innovation they should ask themselves:

  • Specifically, what issue is this innovation looking to solve? What problem isn’t being solved currently by our industry? What unanswered customer need isn’t being addressed? What makes this innovation so popular?
  • What can we change? In what ways can we, as a company, change ourselves so that we address concerns? How can we create value that people are willing to participate in or pay for? Is there a way for us to increase revenues?

By tuning into what customers want and really listening – not interpreting what they say into something you want to hear, companies can tune into opportunities for creating value for their customers. And ultimately, help themselves to maintain and even increase their market share.