As mentioned yesterday, we’re going to be covering Drucker’s key areas of entrepreneurial innovation. The first is the unexpected – unexpected successes, unexpected failures, and unexpected outside occurrences.
Unexpected Successes Unexpected successes are some of the greatest things to happen in business, if you are paying attention to them and accept them. You may think you’ve got it all figured out, but the consumer then heads in a completely different, yet profitable direction. Instead of stymieing the spirit, embrace that success.
Macy’s of the 1950s did the exact opposite of this and suffered dearly. It had always been a fashion provider and sold appliances on the side, when suddenly appliances were carrying a greater part of its business and profit margin. Instead of embracing this shift, Macy’s tried to suppress appliance sales and return the company to the “proper” fashion v. appliance equilibrium, leading it to lost market leadership and decreased share.
Unexpected Failures You may think that something in your product line is the greatest thing since sliced bread, but it flops in the marketplace. Don’t wallow in self-pity. Take this as a sign for shifted consumer values and wants.
To take another 1950s example, think about the failure of the Ford Edsel. I was not around in the 1950s, but I’ve learned a great deal about this. It is one of the classics. As a student, you think, couldn’t there be a more relevant and current example? Why go out and look when you’ve got the Edsel in your backyard? Anyway, I digress.
So, the Edsel failed…miserably. Ford was attempting to create a car for a different economic bracket but found that consumers were not diverging on economy as much as lifestyle. Rather than continuing to push the Edsel, Ford scrapped it and turned in a different design direction. Good thing, because this innovation from failure produced one of America’s greats, the Thunderbird.
Unexpected Outside Events This basically means follow the marketplace. Look beyond your books and your plans to see what the consumer really wants. Without this type of innovation, I would not be sitting here typing (probably a little dramatic, but IBM led the charge toward personal computers simply because of consumer demand). Keep your ear to the ground. You never know what brilliant idea your consumers will have next.