Many company leaders don’t fully appreciate the importance of innovation. I am often invited to speak about innovation at various civic and economic development organizations. The simple fact that I talk about is that you either innovate, or you die!
Many company leaders don’t fully appreciate the importance of innovation. I am often invited to speak about innovation at various civic and economic development organizations. The simple fact that I talk about is that you either innovate, or you die!
If you think that is a bit harsh, consider this:
- In 2007, the life span of the average publicly traded company was 76 years
- Today, the lifespan of the average publicly traded company is 15 years
Still not convinced? Consider this:
- In the last 15 years, 52% of the Fortune 500 companies have disappeared!
Corporate death is not always sudden and dramatic like a “widow-maker” heart attack. It often starts with innovation atrophy coupled with a lack of vision which leads to a slow, often irreversible decline. It wasn’t all that long ago that Eastman-Kodak dominated the film market. In 1981, it boasted sales of $10 billion. Its worldwide employment peaked at 145,000 in 1988. Over the next 20 years, Kodak would cut 125,000 jobs. In January, 2012, Kodak filed for bankruptcy. One of the true ironies of the Kodak story is that they invented and held several patents for digital photography! They innovated, but did not have the corporate vision to adapt and change from their legacy technology.
Another company is Sears Roebuck & Co. (Sears) that virtually invented the mail-order catalog business in the late 1800s. As America grew and new farmers and ranchers migrated west and settled the mid-west and western states, Sears catalog provided the latest modern conveniences and fashions to the remote regions of the country. You could even buy a Sears-Roebuck house by mail. They expanded their retail brick and mortar presence in the 1960s and 1970s. Sears was one of four anchor stores in virtually every major regional shopping mall in the country. At one time, Sears employed over 500,000 people and accounted for 2% of the entire US GDP! As a retail concept, they became irrelevant decades ago and only survived by selling off their core brand assets like: Craftsman Tools, Die-Hard Batteries, Ken-More Appliances and Allstate Insurance. Recently, they ran out of assets, filed for bankruptcy and nobody cared. The irony here is that Sears virtually invented the catalog (or non-store retail) industry. With the proper vision, they could have and should have been where Amazon is today.
So, what is the moral of the story? Innovation, coupled with vision of leadership is essential to corporate survival. No industry is safe (including institutions of higher learning). The rate of technological change is rapidly accelerating which is hastening the rate of disruption.
Three industries have been disrupted in the most unimaginable ways (unimaginable except to the innovators with vision). Consider these amazing facts:
- The world’s #1 transportation company owns no vehicles (Uber)
- The world’s #1 hospitality company owns no hotels (Air B&B)
- One of the world’s top retailer (until recently) owns no brick and mortar retail stores (Amazon)
- 25 years ago, none of them existed!
Disruption is happening faster and faster. To survive, companies must innovate or die!
-Don Morrison
Don is a serial entrepreneur and visionary leader who has consistently leveraged technology to improve the customer experience and top and bottom-line results. Don has been involved in the growth and development of several businesses, including American Eagle Outfitters, from one to 165 stores as President and CEO, Sundance Catalog Company as Executive Director, and Bear Creek Corporation as Senior VP of Sales and Marketing. He is currently chairman of deal flow for BlueTree Allied Angels, a Pittsburgh-based angel investment organization. Mr. Morrison is actively involved in mentoring and coaching several startup and early-stage companies in the region and serves on several boards of directors and advisors including, Pittsburgh Green Building Alliance and was the previous Chairman of The Linden Pointe Development Corporation which operates The eCenter @ Linden Pointe and The Entrepreneurship Academy program for area high school students.