Intuitively, we know that innovation and creativity are important to a business’s growth. We know that new ideas keep businesses growing. But how do those new ideas impact a company’s bottom line directly? This article will provide a few examples of innovative businesses and how those companies’ innovations (or lack thereof) directly influenced their profit margins.
Ulbrich Steel is a steel manufacturing company located in North Haven, Connecticut. In an industry that has been a prominent part of the economy since about 1850, you wouldn’t expect to see much innovation. But Ulbrich is a growing and thriving company that seems to be leaving its competitors far behind. What has set them apart from other steel manufacturers? The answer is simple: innovative thinking and innovative products.
The company has always paid attention to the changing consumer environment and continues to adapt their business models to the changes in buying trends. One of their recent products is a precisely engineered wiring system for solar panels, which increases the output of each solar cell by 2 percent. This product has become an innovative success in the solar industry and caused Ulbrich’s profits to skyrocket—all because they found an innovative way to blend their manufacturing processes with recent advancements in energy.
It used to be that Kodak was a household name. In fact, the phrase, “It’s a Kodak moment” was commonly used to describe any picture-worthy situation. The business was a giant in the camera and film production industry, and was highly innovative for decades. But where are they now? They declared bankruptcy in 2010, and have vanished from the market.
The trouble began in the 1990s, when film photography began to decline in favor of digital photography. Kodak dumped billions of dollars into developing technology for camera phones, but they ignored the growth of digital cameras. Afraid of driving their own film production and development business into the ground, they held back, while companies like Canon dove right into this new innovation. This left them clinging to outdated technology when innovation in the photography industry was on the rise.
Their failure to innovate and take note of their consumers’ changing interests was a prime factor in driving this once thriving company to bankruptcy.
Up until 2005, aerospace company Boeing was beginning to lose out to its European rival Airbus. The culprit of their declining profits was two-fold: instability in management, and complacency in their techniques. Their designs and technologies were outdated, and customers were turning to more innovative options.
But as of 2007, Boeing’s business took a turn for the better due to some innovative changes to their designs. The company developed the 787, which was the first commercial airplane to use composite materials as a primary part of the aircraft’s structure. These materials allows the plane to use 20% less fuel, reduce corrosion, and even improve the comfort of the airline’s passengers. Electric motor systems and enhanced aerodynamics were also included in the design of the 787, and these innovations buoyed Boeing to the top of their industry once again—and they’ve stayed there ever since.
Innovation is a key component in your business’s growth; and a lack of innovation can be key in its downfall. Michael Stigler, SVP of Qmarkets, an idea management software company, noted: "We live in a connected world. Now, imagine your life without your cellphone, without social media, without your laptop. We rely heavily on technology. What better way is there to connect with your employees, customers and partners, than to hear their ideas? Implementing tech solutions is the most strategic, cost-effective, and beneficial way to connect with the most valuable assets in and around your business."
Properly leveraging technology to gather innovative ideas can allow you to stay at the top of your industry and see direct, positive results on your company’s bottom line. It’s a simple solution that can provide your company with ideas, as well as keep a thumb on the changing market, which are both vital factors in keeping your company growing and thriving.