It is by now received wisdom that companies should stick close to their core competencies. “Don’t try to do too much. Stick to your knitting” they say. And thus, the passion is beaten out of companies much as it has been beaten out of individuals for so long.
A related phenomenon is the desire to limit innovation efforts. Many big companies choose to focus on smaller ideas that they know they can execute and that they can accurately forecast.
It seems like a good strategy. I’ll take my existing brands and products and continue to offer minor innovations. I won’t have to invest a lot in those innovations (because they’re minor) and I will most likely succeed in the market because I’m not trying to change consumer behavior or attitude. I’m just tapping into existing routines.
Seems brilliant right?
Not to me. When you follow such a strategy, you are forgetting one rather important fact: you are not the only person or company in the world. There are others out there who will see opportunities to come take your business and they will pursue those opportunities without regard for your strategy of limited innovation.
Here is a general principle: Whoever stands up and offers the most compelling offer will win in the end. Whoever offers consumers the very best widget will win consumers over. If you’re busy focusing on tiny little improvements to your widgets because you like the risk reward ratio and others are betting the farm on revolutionary new kick-ass widgets, you had better expect that sooner or later one of those bets will pay off and you will be standing in the market offering last century’s widget and trying to compete against the best. You will lose.
So think small if you must. Just don’t complain later when you lose.
