Several months ago, I had a discussion with the Chief Financial Officer of an innovative New Zealand company.  Very proudly, he rattled off a number of historical achievements that the company had made, by way of innovative breakthroughs.  To say the least, it was quite impressive.

Within a few minutes, I was eager to see how I could help him build his global business.  I have a particular interest in helping businesses, which I deem to be 'leading edge', to increase their competitive advantage through Social Business transformation.  I asked the question "How can I help?" to which he responded "we are fine".

It wasn't quite the answer I was looking for.  I probed a little deeper to which the response was "everything is good".

Now, there could be two reasons for this, either he thought that I had nothing to offer (possibly arrogance) or that the company had made it to where it needed to be.  This post is based on the latter of the two.

First pride, then the crash — the bigger the ego, the harder the fall. (Proverbs 16:18 - Bible)
This is risky business, especially if this sort of attitude is engrained into the culture of an organisation.  It's an indication, that such a business has stopped listening effectively to the customer and may be becoming irrelevant.  It doesn't matter how innovative you've been, you're only as good as your latest innovation.

I remember in the late 1980's when Japanese manufactured motor vehicles started to be imported into New Zealand.  We had a number of vehicle assembly plants located around the country, the following is a list that come to mind:

  • Ford - assembled in South Auckland
  • Mitsubishi - assembled in Porirua (Wellington)
  • Toyota - assembled in Palmerston North
  • Honda - possibly assembled in Wiri (South Auckland)
Today, most, if not all of theses assembly plants no longer exist.  To this day, Japanese imports are still a top source of motor vehicles on our roads.  Why?  Because the Japanese were able to provide a more innovative product at a reduced price to the consumer.

You might have a new and innovative product, but the chances are, your competitors also have it and are pulling it apart to find a way of manufacturing something which is both better and also cheaper.  They are systemically cashing in on your costs of innovation, sales and marketing.

As I've mentioned before, Social Business is the competitive advantage.  It provides businesses with the ability to engage more effectively with their customers and helps them to "put on their listening ears".  As a result companies are likely to be able to increase the success of innovation and reduce the time it takes to bring new innovation to market.  The most likely results being reduced costs, increased revenue and greater profit margin.