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Innovate for a sustainable advantage

Innovation is at the heart of capitalism and free enterprise.
Read time 3min 30sec

What a wonderful thing hindsight is. Nowhere is this aphorism more true than when it comes to innovation. In 1899, Charles Duell, commissioner of the US Patent Office, is reported to have said that he recommended the closure of his office, as: "Everything that can be invented has been invented."

Then Tom Watson, founder of IBM, is alleged to have said in 1943: "I think there is a world market for maybe five computers."

"640k ought to be enough for anybody." So said Bill Gates, who went on to create the most memory-intensive company every created. Just think of how Windows and Microsoft applications slow down your machine, which now as standard has 16 times the limit Gates imposed on PCs.

"There is no reason for any individual to have a computer in his home." So said Ken Olsen, founder and CEO of Digital Equipment Corporation in 1977. The company was subsequently acquired by Compaq, which made its fortune by putting a PC in everyone's home. Compaq, of course, was then acquired by HP.

What these statements by industry giants tell us is that innovation has a life of its own. We cannot place limits on inventiveness, on creation and creativeness. Innovation is at the very heart of capitalism and free enterprise. It sets individuals and corporations apart by their ability to create something from nothing. As the Latin roots of the word suggest, to make new something that previously did not exist.

Inspired to change

Incrementally, any company can build a slow but sustainable edge over its competitors.

Rob Abraham is MD of Bytes Document Solutions.

Every time we think the limits of creativity have been exhausted, something new comes along to redefine a genre. Examples include:

* Apple created the home PC with the Apple II. IBM took the market with the PC. Apple has not been a factor since.
* Sony created the portable digital player category with the Walkman; Apple took it away with scarcely a shot fired with the iPod.
* Toyota has created an entirely new automotive category with the Prius, which combines electrical and petrol-driven motors in a hybrid car that both saves on carbon emissions and provides the power and acceleration drivers want. In five years since its release, no one else has come close to matching the Prius.
* Xerox has developed solid ink technology which reduces the number of units required to produce high-quality output, the amount of carbon required to produce quality paper coverage, and the resultant landfill. This despite the near ubiquity of the standard HP-compatible toner cartridge.

Hard work

These examples serve to show us a few truths. The first is that while companies should be first to market with a new category, leadership is not a given. Businesses need to work hard to establish, retain and project the unique characteristics that got them there. If the company is not there, it needs to expend the appropriate time and effort to get there.

The second is that even if someone else beats the firm into a category, it can still make major inroads into an existing market, and in fact dominate that market, with hard work.

The third is that incrementally, any company can build a slow but sustainable edge over its competitors.

What is required of management in such a situation is that they can see the micro- and macro-trends, and prepare themselves to deal with these trends, and invest the time, money and other resources to turn potential negatives into total positives.

It's worth remembering that only two factors set any company apart from its competitors: its quality of engagement with its customers; and its commitment to innovation. How it embraces these two aspects will determine its level of success.

* Rob Abraham is MD of Bytes Document Solutions.

Rob Abraham

MD of Bytes Document Solutions

Rob Abraham is MD of Bytes Document Solutions.

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