Innovation
in business
By Evan Wise, Managing Director
of Management One
Recently
I was reading about Henry Ford and how he started the
Ford Motor Company.
In short; He was an engineer working for the Edison
Light Company in Detroit. In his spare time he built
a motorized car in his garage. He was promoted at Edison
until he was offered the job to manage the entire plant
“if” he would give up wasting his time tinkering
on automobiles. He quit the company and got some investors
together to build a car company. They bought the engines
from Dodge and the rest of the production was outsourced.
The company was making money but Ford saw that the cars
were too expensive. He saw an opportunity to fill an
empty niche by making a cheaper car so everyone could
buy it. He bought out the others and experimented with
his assembly line. This was not a new concept but no
one had ever done it on anything as complicated as a
car. The line started at one end of the shop and a winch
pulled the chassis through the shop. Six workers traveled
with the car and assembled the parts from each station
they passed. Soon they upgraded the process to a moving
belt and different workers manned each station. The
Ford Motor Car Company was born.
The
true genius of Ford’s innovation was applying
a delivery system to a market. He didn’t invent
the car or the assembly line. He did see the need in
a market and devised a way to deliver the product to
that market.
Look
at another example. Ray Kroc walked into a hamburger
joint to sell them a milk shake machine. What he saw
was a fast food restaurant that operated like clockwork.
Students were moving product out the door with speed,
efficiency and consistency. He bought the rights to
the process and later he bought the company called McDonalds.
He recognized that the process was possible to duplicate
and he could grow by franchising. He was not in the
hamburger business but rather, he was in the business
of selling franchises. The world didn’t need more
burgers. The world did need a way for ambitious people
with some cash to get involved in a successful operation
that could make them wealthy. He didn’t invent
the franchising process. He did recognize that the success
of the franchises depended on consistent product, training,
and delivery.
Again,
Ray Kroc recognized that the product did not make the
business. The product was necessary but his method to
deliver the product to the niche that needed it was
the innovation.
This
leads us to your business. These companies were large
companies because the niche they filled were national
and international in scope. Most small businesses target
a narrower niche that Ray Kroc or Henry Ford. The laws
of business still hold true. A great product does not
make a great business.
A
great business requires an innovative entrepreneur to
see the right niche and devise the right method to fill
that niche effectively. If your business is selling
doughnuts, how can you make the process of delivering
doughnuts to your target audience more effective. In
my hometown many years ago the local doughnut shop had
a van with doughnuts and coffee that went to every construction
site in the town first thing in the morning.
The movie Field of Dreams had the tag line, “build
it and they will come.” Many small business owners
believe that philosophy for their own business. They
believe if they buy merchandise it will sell. They believe
if they open the shop people will come there because
they opened the shop. “Build it and they will
come” is a dream! It takes more than product to
have a successful business.
It
all starts with innovation. Then you must get to work
to make it happen. That is where strategic planning
leads to execution which leads to change and more innovation.
Success in business is not hard if you do the right
things. You don’t need to be a Henry Ford or a
Ray Kroc. After all, they were a factory worker and
a milk shake salesman before they began to innovate.
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