Tactical Focus of Innovation

Top-line innovation (new sales, markets, customers) or Bottom-line (process improvements, cost savings)? Some would argue if I can't get my service or product out the door, I better figure out a way to get it done (better process method, better quality system). BUT, are you growing? What are your sales trends the last 2 years (up, down, flat)? How are your profit margins (stagnant?, growing?, nose-diving?)

Focusing on a bottom line cost saving project while ignoring negative top-line trends is sort of like rearranging the deck chairs on the Titanic. It looks OK until the base that the chairs are on starts to tilt. Our operations, whether we're providing a product or service (physical or web), are much the same. We tend to focus on what we see. We see the day-to-day operations that we touch and we focus on improvement or reducing our variation in whatever the process is.

Does the process have too many steps? we reduce them. Too many documents? we streamline them. The only problem is that while we're reducing the operational variation we are probably ignoring the top-line lack of variation in growth that we desperately need to maintain profitability.

Customer Sales, Products, and Markets need increased variation. Kind of an oxymoron isn't it? So much focus on tightening up our process on one side of the balance sheet with the need to expand it on the other. How do we define good variation then for the top side of the balance sheet?

Ask yourself some questions:

• How can I increase my client base so that 80% of my revenue does NOT come from less than 20% of my customers?
• What other market segments can my product or service be sold in?
• Are my current customers in trouble? Can I take an interest in solving their chronic issues with a partnership that benefits both of us? Am I aware of their pain points?
• Is my reach for developing a new product or service just out of arm's reach? In other words, am I looking to develop the next Iphone when my available time and development $'s tells me I should narrow my focus to the next Iphone cover (product extension)?

Let me know how you've answered these questions or others you think are good ones to ask?

As the blog implies, tactical innovation involves action. Sometimes the best action starts with great questions.