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The Yin and Yang of Business

“Business has only two functions – marketing and innovation" Peter Drucker…really – why’s that?

Peter Drucker made this statement back in 1973 but it is just as relevant today.

Marketing and innovation are the two drivers of business that deliver customers, today and into the future. And of course without customers you have no business. Everything else flows from that simple starting point.

Customers must be front and centre

Production processes, sales and human resources are without doubt critical elements of any business model, but they are not the starting point. Understanding who your customer is and how you will satisfy them is the key. From there you are able to determine the appropriate production model or the type of resources that you will need in order to deliver. All aspects of your business model should be structured in such a way as to ensure that you are able to deliver value to your customer for an appropriate return.

Marketing – delivering value to your target market

The marketing function should define how you create, communicate and deliver this value to your target market. It aims to answer key questions around who are your customers, what are their needs and what product/service can you provide to satisfy those needs. How you will price. How you will deliver it to them. How you connect and engage are all critical elements.

Marketing really is everything you do to provide value to your customers today. It is how you provide and reinforce your point of difference and value proposition at each and every touch point. So you need to ask yourself - are you clear on your value proposition? Does it provide value? Does it engage and connect with customers?

Innovation – a practice of renewal

The innovation function, on the other hand, works to keep your business relevant into the future. We live in a dynamic environment where the rate of change is ever increasing. Changes in technology, increased levels of competition, concerns around the environment, and changes in how we communicate all have implications for the products and services that our customers need.

Innovation, at its core, is a practice of renewal. Changes - be it to a business process, to products themselves, to how we create and communicate – are all aimed at satisfying and exceeding customers’ needs and desires going forward?

Don’t let innovation be a blocker

Innovation has become an overworked and overused term. I attended a seminar recently where Gary Bertwistle , a thought leader in innovation and creativity, talked about innovation as a concept that can quite often become a blocker. Too many people speak the words but don’t know what to do next – in many instances confusing invention with innovation. His suggestion was to stop talking about innovation and focus on helping people and teams to “think differently” – the outcome will be creativity and new ideas.

Asking people, “what if” and “what else”, “imagine if” is a great way to take people out of the everyday and think beyond the constraints. Try it during your next strategy planning session – just don’t call it an innovation brainstorm!

Finding time to just think and not filling the diary is another key to unlocking creativity and innovation. Organisations such as Disney and Google mandate that their staff spend a certain number of hours each month working in a different department just observing. New ideas, suggestions, new ways of doing things can be the result of having people with a different perspective look at your operations.

Make innovation possible

Make sure you create the environment in which your staff can innovate or think differently. Too often we send mixed messages. We talk about creating an innovative culture but we are afraid about moving away from the tried and tested, and what we think our customers want rather than need. The mantra is to do things differently but we punish the risk takers for failure. Striking the right balance is critical in creating an environment where new ideas and practices can emerge and be trialed and tested.

Ensuring that marketing and innovation can occupy the central part of your business model, and the way you work, is critical if you want to stay ahead of the competition and attract and retain the right types of customers – today and into the future.

by James Atkins, Vantage Strategy & Marketing.

This article is linked to James' Google+ profile

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