Innovate!! Need of the times

In organisations nowadays innovation is the buzzword but what we are finding is we are struggling to innovate. This is because rather than overcome the fear of failure in trying out new things what we are concentrating on in the name of innovation is to find ways to optimise on existing operations. The prime concentration towards innovation efforts is in the area of cost rationalisation, how to gain on profits optimising on existing operations.

For business to survive in the long run there should always be constant endeavour to seek out unchartered territories besides maintaining the moat around its existing operations. This requires coming out with innovative ideas that typically might not be associated it.

I happened to get rumbling on this by sampling recent products from Amul. Amul being associated with dairy products took me a bit by surprise when I found it had diversified into providing for ready made patties that can be had with burgers, ready made pizza crust that can be now baked in oven and eaten. This is an example of the power of innovation. Recognising the need of the times where people fear to go out and are afraid of ordering food from outside; besides people are also extremely busy these days, so if their lives can be made simple by introducing new conveniences this helps the people as well as the business to build on peoples trust and thereby drive growth.

The need to innovate and in consequent to drive growth has implications for listed companies to draw investors. Every discerning investor likes to see his company maintaining a healthy top line growth besides the bottom line growth to judge whether it is worth continuing with his investment in the company or not. In the absence of top line growth he seeks satisfaction in whether the company is allocating budget towards R&D efforts that would propel innovation to seek out new areas by which again a health top line growth can be achieved. It is only up to a certain extent one can go by just innovating only towards bottom line growth.