Note from Raj Echambadi: The original title of this post was “Innovation is THE output not just means to the output.” I shared this post with Kurt Bock, CEO of COUNTRY Financial, who suggested this alternative title. Many thanks to Kurt for the title that I think best captures the intent of the post.
Marc Andreessen of Netscape fame (an alumnus of the University of Illinois) said something great on the Charlie Rose show last week.
“The core idea we have, the core theory we have, is that the fundamental output of a technology company is innovation and that's very different than a lot of businesses, right? The fundamental output of a car company is cars. Or the fundamental output of a bank is loans. The fundamental output of a tech company is innovation, so, the value of what you've actually built so far, and are shipping today is a small percentage of the value of what you're going to ship in the future if you're good at innovation. So the challenge tech companies have is they can never rest on their laurels with today's product, they always have to be thinking in terms of the next five years of what comes next and if they're good at running internally and are indeed a machine that produces innovation, they tend to do quite well over time. It's when things go wrong internally and they stop innovating, which happens a lot, the wheels at some point tend to come off.” (emphasis is mine),
To me, the highlighted sentences in bold capture the essence of the power of innovation for all companies. The critical thing is that an innovative culture enables a company to believe that their current sales are a fraction of what their innovative potential will enable them to achieve in the future. Innovation accelerates future revenues while simultaneously lowering both their volatility and vulnerability. Therefore companies must pay attention to their innovation philosophies in order to survive and thrive in the future. This is powerful stuff.
Professor of Business Administration and
James F. Towey Faculty Fellow and
Executive MBA Academic Director