Posted by admin on June 29, 2010 | View Comments

 

It’s always interesting to check out the business bestseller lists and find a long-running title like Good to Great still selling briskly after being in print for nearly ten years. (One might even say that Jim Collins wrote his bestselling book with the goal of being, ahem, Built to Last) There’s clearly a huge, pent-up demand from mainstream business readers for this type of content. Senior executives want to know how companies like Amazon, Apple or Google became market giants. Line managers want to know the daily steps that companies like GE have taken to stay at the top of their game for so long.

But what about formerly great companies that are now merely good — the ones that went from Great to Good and are now trying to re-claim their innovation mojo? As experts such as Steven Levitt of the New York Times Freakonomics blog have pointed out, these companies that have gone from Great to Good are more common than one might think.

After all, the Great Recession has helped to shake out the business leaders within every industry. Within the housing sector, it means that many formerly great companies – like Home Depot and Fannie Mae – are attempting to re-claim their innovation greatness after a brutal real estate shakeout.  Regardless of industry, the various strategies for regaining innovation greatness revolve around one of the following pivot points:

(1) Focusing on the Core – Not surprisingly, the most popular strategy is to retrench and focus on what works. For companies, that means abandoning all the useless product line extensions, closing down stores and focusing on what made you great in the first place. Greater focus on the core inevitably leads to better results, at least in the near-term.

(2) Expanding into New Markets – This is basically the opposite of focusing on the core – it’s for companies that are facing long-term structural changes to their industries or consumer base. This means finding new markets to penetrate — and in some cases, creating entirely new ones from scratch. In other words, finding the next Blue Ocean.

(3) Bringing in New Talent – Sometimes this is as simple as bringing in the original founder or CEO to revitalize the troops. Consider how Michael Dell returned to Dell to guide the company to a new round of growth. Sometimes it requires bringing in an outsider who doesn’t come with baggage in the form of preconceptions of how an industry operates.

(4) Changing Market Perceptions – Changing the way people view your company usually requires a massive new re-branding campaign. In the case of Gap, it meant bringing in celebrities like Sarah Jessica Parker to merchandise product in new ways. In the case of Polaroid, it means bringing in Lady Gaga as the new Creative Director. The goal of any re-branding campaign is to remind consumers of what made you great in the first place, while adding a bit more “sizzle” to your classic offerings.

(5) Cutting the Fat - The basic idea behind this premise is that your company or organization has gotten weak and lazy over the years and it’s time to go on a new fitness regime to shed some weight. Usually, this strategy goes hand-in-hand with focusing on the core. For some companies, it’s as simple as bringing in the management consultants to find redundancies and possible cost reductions — like that Gulfstream corporate jet.

Of course, most companies attempt all sorts of permutations of these strategies, depending on how precarious they view their situation.

Starbucks, for example, has taken all five steps to re-claim its innovation greatness over the past 24 months. First, Starbucks re-focused efforts around its “core” — bringing back Pikes Peak as a symbol of their devotion to great coffee and re-evaluating its other food and beverage offerings. They’re also instituting free Wi-Fi as of July 1 to revitalize the Starbucks cafe as a true “third place” destination. Secondly, they’ve expanded into new markets, mostly by experimenting with emerging technological platforms like Foursquare that connect online fans and offline Starbucks stores. Thirdly, Starbucks brought back original founder Howard Schultz in 2008 after an absence of eight years to infuse new energy. Fourth, they’ve tweaked their marketing campaigns in realization that the recession (and greater competition from the likes of Dunkin’ Donuts and McDonald’s) means that asking consumers to pay $5 per coffee is no longer as feasible as it once was. Fifth, they’ve embarked on an ambitious plan to pare back costs and streamline their store rollout strategy.

Will these steps be enough to restore Starbucks to innovation greatness? The steps are certainly an encouraging sign that the company is serious about regaining its innovation mojo. Until Jim Collins decides to write Good to Great… to Good to Great, the question of how great companies can regain their former market status will be one for business schools to debate for years to come.

What do you think?

Photo Credit: Wikimedia Commons

This entry was posted on Tuesday, June 29th, 2010 at 12:12 pm and is filed under Collaboration, Innovation. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.