Hey!
I was doodling this week, waiting for a store to open in the mall, and I came up with a drawing for what innovation really looks like:
- Insight
- Creativity
- Action
A circle.
That’s innovation.
Let’s take a look at this idea:
First, insights.
Insights are the understanding of the cause and effect of a situation.
I posted on LinkedIn on Friday about Tesla’s need to offer a new round of price cuts.
The need for the new round of price cuts was evident in the reality that demand that would have been captured in the second quarter of 2023 was “pulled forward” by the discounts in the first quarter of 2023.
Meaning that Tesla stole sales in the first quarter from the second quarter and the profits were lower because Tesla discounted to get those sales in sooner to meet the “expectations” of Wall Street.
Now, Tesla will enter the “Doom Loop of Discounting” because the demand will be soft in the second quarter due to the sales being pulled forward in the first by Tesla’s discounting. And, to try and solve the problem, they are forced to discount again.
That’s insight.
That’s the start of innovation.
Second, creativity.
Creativity is important in innovation because you need to try and improve your business.
You don’t do that with problem solving because problem solving is just getting you back to the status quo.
In Tesla’s case, they are just trying to tread water to meet Wall Street’s demands.
That’s problem solving. That’s commodity thinking.
That’s what leads to the “Doom Loop of Discounting”.
Creativity in this situation would ask what should I do about this insight that discounting is killing off our demand?
You probably pose yourself with some questions:
- How do I stop discounting?
- Why are sales slowing?
- Is it really about the price or is it something else?
You can go on and on like this.
The magic happens when you combine your insight with some creativity.
As an example, I’d say one of the challenges we are dealing with as a brand is that we have two pressing challenges:
- The brand is closely connected with Elon Musk and his acquisition of Twitter has undermined some of our brand equity with some of our key segments.
- We haven’t traditionally had to advertise due to the lack of competition in the electric car market and our ability to generate positive press.
That’s where the marriage between creativity and insight comes together.
The final piece of the puzzle: action.
You know what action is…doing something.
Taking the first step to improving your situation.
Creating a bias for change.
In this example, first thing I’d do is take a step back to see the market.
Diagnosis.
What does the customer want?
What does the customer need?
What are my brand associations right now?
Second, I’d spend some time creating a plan.
Discounts are a sign of a business with no strategy.
You need to answer a few questions from a brand strategy perspective:
- Who are we targeting?
- What is our position?
- How are we going to express that?
Finally, I’d take action consistent with this plan.
Along the way, I’d learn. I’d feed this new insight back into the system, figuring out how to use some creativity to elevate my performance, and act once again….
Over and over.
This cycle never ends.
That’s innovation.
Pushing forward consistently.
What do you think?
Want to learn more about this topic? Join my FREE webinar: “Innovation Never Ends: 7 Keys to Staying Ahead of the Competition NOW and in the Future!” Wednesday, April 19 at 11 AM Eastern.
Can’t make it live? I’ll provide a recording of the session to everyone.