Product Innovation

August 1st, 2012 | Innovation

Every now and then I have the opportunity to visit with a colleague of mine that I respect a great deal. When we get together the discussion mostly centers around our careers and business opportunities. A few days ago we were sitting discussing the book Steve Jobs by Walter Isaacson. (It is a great read for those of you that have not read it.) We were discussing what we each took away from the book. There were many items in our discussion. One of his most insightful came in a comment he made midway through our discussion. “Engineers are replaceable. Product innovators are not.” This was not a knock on engineers. Engineers are immensely important to companies and in today’s economy are extremely hard to find. It was not a comment meant verbatim. It was his way of saying, “product innovation needs to be instilled in the culture of your company’s marketing and R&D efforts.” I completely agree.

The difference between an engineer and a product innovator is that a product innovator adds value beyond engineering because they understand the job the product or service is replacing for their customer. They understand the handoff processes that come before and after the product. They understand how and why the products are used. As importantly, they understand when and why their products are not used. They visit customers and have in depth discussions with sales and marketing. A product innovator incorporates all of this understanding into their work.

With the elections looming, there is a lot of discussion in the media about exporting jobs. Engineering is one of those jobs that can be and is exported. Product innovation, by definition, cannot be exported. Product innovation requires one to understand the customer first hand. It requires customer visits. It requires discussions about how the products will benefit the customer. It requires understanding why it will help the customer solve a problem or what job it is replacing for the customer. It is an iterative process. It requires being local.

This is true in China, India, Germany, and any other country as much as it is true in the U.S. If you are selling products all over the world, your product innovators need to be local. You can accomplish that in many ways based on the size of your company. Smaller companies may use distributors to help them be local and understand the marketplace. Larger companies may have direct offices with local employees. However you do it, understanding your local customers is critical and must be part of your product innovation culture.

My colleague and I are both engineers. We also work everyday to be product innovators.

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Introduction

May 8th, 2012 | Blog Introduction

I created this blog because I am a big proponent of open dialogue and the sharing of thoughts and ideas. This blog gives our company a platform to do this and gives the readers an insight into the culture of Kinetix Growth Strategies. I have the opportunity to experience a wide variety of companies and communicate with many business owners and executives. I have gained a tremendous respect for the ability of smart business people to apply their capability to think openly and use their experience to apply new thinking to other markets.

I am a firm believer in learning from other organizations. Not only does this allow executives to learn how other businesses operate in different markets, it sparks a competitive gene within them. I am a member of the Inc CEO Project where this phenomenon happens regularly.

I am also inspired by a few blogs that I read on a regular basis. Two in particular are www.avc.com and www.abovethecrowd.com. Both share valuable insights into their thinking and experiences. These two blogs focus on the internet/cloud industry. While I do not have any specific experience in these industries (besides being a customer) I think there is a lot to learn studying the creation of new industries and the business models that derive from them. These blogs give real time insights into the formation of this industry.

I hope sharing my experiences and listening to others through this medium will stimulate all of our thinking. If it does, this blog will be a success.

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Simplicity

April 25th, 2012 | Executive Management

I have the opportunity to talk with many executives in a wide range of industries.  It is what I enjoy doing most.  The most intelligent and successful business managers have a common characteristic.  They are able to simplify.  There is a quote by a well known inventor, Charles Kettering, that states, “This problem when solved will be simple.”  Successful managers are able to take extremely complex situations and communicate them in a very simple and defined manner.   Per Kettering, once this has been done, solving the problem becomes much easier.

Jack Welch continuously states that business is simple.  This is true.  His ability to view business in this manner is what made Jack Welch a great business manager.  He was able to interpret complex situations simply and then communicate them as such.

When you communicate the challenges and goals of the business in simple, defined statements, it is much easier to get the entire team headed in the same direction.

There are many managers that think they are communicating their challenges and goals in a simple manner when in fact they are not.  They do not see the difference because they are too deep in the situation.  As a check, communicate your message to people outside the organization and even outside the industry.  Is it simple to them?  If not, make it simpler.   You will be more effective.

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The Importance of Succession Planning

April 25th, 2012 | Succession Planning

I was speaking with the insurance agent that handles the health insurance for one of our business investments the other day.  He was telling me about a very unfortunate situation in which the owner of a business unexpectedly passed away.  The reason he called me was because he knew that Kinetix invests in business-to-business companies such as this one.  He asked me if we would be interested or if I knew of anyone that would be interested in the business.  The owner ran the day-to-day operations of the business and was the single contact for the majority of its major customers.  He had not done any succession planning within the business and had no one that could take over the reins.  Without an individual ready to step in to take the owners place Kinetix was not interested in an investment in this company.  Unfortunately, I am afraid this is probably going to be true for many investors leaving only competitors or possibly a big customer left to acquire the company.  Or worse, the business will end up closing the doors.  In any case, I am afraid the business is going to suffer greatly.

While this story was an extreme case, it should get you thinking about the key positions within your company (including yours) and who would step in should a key employee take another job or leave for any other reason.

A succession plan for all of the key individuals within your organization is vital for the longevity of the business and a better valuation.  The smaller the business the more difficult it is to have a successor for all of the key roles.  Even so, you should spend time thinking about succession.  Even if you end up not needing it for some time, it will make your company stronger.

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