That “Stupid” Idea.

Think about a few innovative companies — which ones comes to mind? Amazon, Google, Facebook, Tesla, Uber, AirBnB, Apple, and may be a few other “usual suspects”? Hmm, let’s call this group the “Usual Suspects”!

Now think about what innovation looks like in your company or companies you’ve worked with or for? Got a few? What are they? Unless you work in any of the “Usual Suspects”, it’s very likely that they fall into a few common categories: process automation, simplification, elimination? bots? apps? Now, these are all great! The thing worth noting is….none of them are what anyone would associate with any of the “Usual Suspects”.

In this HBR article, most of the things we typically associate with corporate innovation are Core Innovations. And as I always say, Core is super important, after all, we do need to get paid by reliable and efficient HR and Payroll systems — but it isn’t the only thing we should be doing, especially in an “unprecedented”, unpredictable world that we live in today. Just relying on Core Innovations, is akin to…well, just having a single, reliable source of income.

I like how Alex Osterwalder jokingly puts it:

Efficiency Innovation (Core Innovation) helps the entity to die more efficiently.

Sustaining Innovation (Adjacent Innovation) is like life support.

Growth Innovation (Transformational, or Disruptive Innovation) is the future.

The trouble with “Transformational/Disruptive” and “Innovation” in general, is that it seems so….grand…so formal…..so expensive — and that’s why it’s so counter intuitive….the patterns and observations indicate it’s anything but.

As the late Clayton Christensen puts it, potential disruptions almost always look….stupid. Not stupid because it’s silly. “Stupid” because no one has done it before (or at least, no one has done it in this way), so it “makes no sense”.

Photo by Nick Wehrli from Pexels

You know what else “made no sense”? Netflix doing what they did — and getting laughed at by Blockbusters when Blockbusters could have apparently bought Netflix for $50 Million back in 2000.

Another stupid idea? Amazon — as a primarily E-Commerce company — deciding to invest in Web Services. AWS is still turning profit — and quite a lot of it. One thing worth noting that not many know is how many times Amazon failed. Yeah, not just the Amazon Firephone etc — there are so much more that probably got killed before even reaching the public.

But these are all “classical” examples of truly innovative companies and it’s always easy to look in hindsight.

The trend in this company’s performance is pretty interesting and although I’ve never really heard any stories about how they manage the pivot, the statistics speak for themselves — their revenues has been increasing but the business lines contributing towards the growths changed drastically.

Any guesses as to what this company is?

This is Garmin’s Earnings data. I for one, would love to hear who the brave soul(s) was/were.

Who were the one(s) who pitched and convinced their executives that Fitness/Outdoor was the direction the company needed to pursue, rather than continuing their path towards apparent doom that was their “bread and butter” — the automotive industry.

Which executives had the leadership and the guts to steer the company through this completely unknown territory that was Fitness/Outdoor?

You know what was STILL Garmin though? Their navigational know-how. That was the “core competency” — that’s the consistent component across their pivot into a “new business line”. I think it was Alex Osterwalder who said this — a truly innovative company is not defined by the industry it’s in.

What “industry” is Google in? Amazon? Tesla? Ping An?

Energy? Automotive? AI? Financial? Data? Insurance? Medical?

Another company that managed to retain it’s “core competency” was Fuji. I always find it amusing that Kodak is the classical example a sure way for any company to meet its demise, but not many look to see how Fuji adapted — and still leveraged its “core competency”.

All of these companies have a few things in common:

• They are not defined by their industry — rather by their core competency. This “loosen” up their future possibilities considerably, allowing them to pivot.
• As a result, the “obviously stupid” ideas don’t look so “stupid”. Garmin wasn’t just “leaving the automotive industry for the fitness industry” (Oh, gosh, doesn’t that sound like a “stupid” idea?), instead what it did was “found new ways to leverage its core navigational expertise” which, when combined with a new technology which someone else invented — wrist based heart rate monitoring — gave new life to Garmin.

Now, how many “stupid ideas” can we come up with?