By David Hoag
Chairman, B-W Business Advisory Council
June 2004
Businesses strive constantly for growth. Investors reward companies that grow wisely –and punish those that don’t.
Some companies are in no-growth industries; others serve markets that are in economic valleys. Some niche companies have strong profits but face limited expansion prospects. Still other companies are losing share, often to foreign competitors or to domestic companies that are outsourcing production to cut costs.
Growth is defined as increasing revenues profitably. Avenues to growth include winning share from competitors; entering new markets, both geographically and by finding new uses for existing products; exporting products; enhancing products by making them better, easier to use, less costly or environmentally superior; developing new products, and making breakthroughs such as substantial cost reductions.
Innovation is crucial to growth. Whether innovation refers to new products and new processes, or simply to a new way of looking at an old problem, innovation is the engine that drives business to the next level.
We often hear that innovation is the hallmark of American business.
But are U.S. companies structured to reward innovation and entrepreneurship within the organization? Or does the corporate, or even the small business culture, stifle creativity?
These questions reflect a conundrum for business.
I believe that unless innovation has been historically and continuously central to a company’s mission, its leaders will have a difficult time encouraging it. Yet innovation is vital.
For companies to thrive in our complex global economy, leaders must foster and reward innovation and an entrepreneurial culture, from the executive offices to the managers to the department level to the individual workers.
We cannot have growth unless we move forward, and we cannot move forward without innovation.
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