Innovation for CEOs

Innovation is one of the most misunderstood concepts; time to clear things up.

What is an innovator?

Definitions abound by all kinds of academics and business experts, but in reality most innovations are just a new way of doing something.

One of my favorite innovations was George Foreman’s lean, mean, grilling machine and all of its recent derivatives. George just developed a way to reduce the fat in grilling. His simple innovation has resulted in about 100 million George Foreman Grills being sold since they were introduced in 1995.

In 1997 Foreman entered into a $137.5 million deal with the grill manufacturer for unrestricted global use of his name to market the devices. Not bad for such a simple innovation by a classic entrepreneur who was also the heavyweight champion of the world at one time and who went on to reclaim the title when he was 44 years old.

Another part of the confusion about innovation is how symbiotic it is with entrepreneurship. Entrepreneurs are innovators by nature.

Foreman is infamous for the entrepreneurial/innovative way he has used his name and persona to market a clothing line for big men, shoes for diabetics, a chain of health-food restaurants, household cleaning products, and even his Big Boy sausages. If you visit his website you can buy cookbooks, autographed boxing gloves and even his memoirs. And George has done all of this while boxing and having 10 children!

Another confusing description for a real innovation is “disruptive technology”. The best way I can describe disruptive technology is an unexpected new way of doing things that through a quality, price or service improvement changes the dynamics of the marketplace.

Dell changed the business model for selling computers when they introduced their online model for ordering customized computers. Dell eliminated the need for finished goods inventory in stores or warehouses, and in so doing created a cash cow as a result of customers paying for the product before it was made, and in turn allowing Dell to pay their suppliers before the product was delivered.

Starbuck’s was another classic innovation when introduced and for many years thereafter. How about the Swiffer, a simple replacement for the age old mop and pail. Even better was the Tide Spot Stick for removing stains from ties and clothing.

Something that I had been waiting years for was the iPod. And what an innovation the iPhone has become.

Apple, through Steve Jobs creativity and vision has become an icon for innovation. Apple stores are jammed with customers talking to iHeads and sitting at Genius Bars waiting to be helped. How about that for innovative retailing?

Rachel Ray began with her 30 Minute Meals concept and has expanded the market for all things tagged with her logo, much like George Foreman before her and many others who have become a part of our world. I often wonder, what did everyone do before all of these wonderful innovations?

I guess the real explanation of innovation is the entrepreneurs perpetual ability to come up with better, faster and cheaper solutions to their own and others problems. But, the best innovations are those that solve a problem before the customer realizes that they have it.

Think about all the problems that you encounter or things that bug you in your day-to-day activities. Each one of those problems or daily irritants represents an opportunity to come up with a creative and innovative solution. Look around your marketplace at all the issues customers have or problems that they constantly deal with and you will have a list ripe for potential innovations.

What kinds of innovations can you come up with for your business?

Bob Donnelly is the Editor of the online Entrepreneurial CEO column for Chief Executive magazine.