If you aren’t working on developing your business for tomorrow than where are all of your resources going? Many get caught up in taking care of the running of the business day to day that there action for where the business needs to go to really thrive in a year or two. In today’s economic environment it makes sense that businesses are focusing on being in the present and working for in quarter revenues. However this does not build the company, let alone allow it to survive in a few years.
I heard about lean Innovation earlier this year at a webinar by Barry Cross who teaches operations and technology at Queen’s University. He stated that two factors that prevent businesses from pursuing innovation are lack of resources and short-term thinking. At the same time, he talked about a Bain and Co. a survey that stated management believes that businesses are too complex. Put these two together and the solution to having resources for innovation is to simplify businesses – reduce products and services – and create the company’s future. Makes sense.
For example, if we take a look at the diaper business – there are different sizes of diapers (newborn up to size 6), than there are swim diapers, pull ups and sleep pull-ups. That is enough confusion right there. Then there are different types of diapers – ones for movers, ones with different patterns for various seasons, and recently more hypo allergenic ones. When I worked at Procter and Gamble over 15 years ago they used to have different diapers for boys and girls. Then there were the ultra-diapers which fortunately were uni-sex. In the first month on the job we found out one of the CEOs of a major customer had had a child and his wife couldn’t find the right size Pampers at their local store. My tasks was to send him the right diapers ASAP. Not having had kids or knowing how old his child was I went in search of the closest mom in the office. Solution: Send the Ultra diapers in all the sizes. Fortunately they figured out they could do with only one type of diaper (rather than boys, girls and ultra). With the reduction of the boys and girls diapers there were resources available to create the swim and hypo allergenic diapers.
There are countless other examples of companies and brands that have gone further than they needed to in expanding their offerings. Instead of re-evaluating offerings new ones are introduced to market while the existing services stay. Do customers really want all that selection? How much is it costing you to offer that much selection? Is the cost of providing that offering as high as your future offerings could be? What can be cut down to make room for projects that will be the future of your company?
Thinking about the telecommunications industry, there are a number of legacy services that are sold by carriers to a small group of customers. At times to migrate customers off of the legacy services prices are increased annually till customers leave on their own. While it appears not much time is being spent on the legacy services that are bringing money in there are many hidden costs that get grouped in with another product or service. At the same time they take focus away from thinking about the future. Save your company years of discussion about dying products and services and cut the strings to focus on where the company is going.
Should the same people that re-evaluate offerings also be on the new initiatives or should they be separate? I believe it depends on the company culture. What do you think?