This piece is the first of what will be monthly contributions to the Drucker Exchange by Brand Velocity, an Atlanta-based consulting firm that is putting Peter Drucker’s ideas into practice at major corporations.
You may have heard the (hopefully untrue) story of the little boy caught feeding birdseed to his cat. When asked why, he replied that it was because that was where his canary was.
This story can be applied to successful innovation. Peter Drucker taught us that innovation is the only true source of profits, and requires simultaneously doing new work, doing current work better and stopping work that should no longer be continued. It is the opposite of feeding birdseed to struggling, or more-than-struggling, canaries. Doing all three things at the same time is the foundation for sustainable reinvention.
As the result of these three actions, value can be systematically created by serving current customer needs better and improving products and services over time.
There are many innovation success stories. One is Trader Joe’s. The grocery chain not only has cachet; it offers good value and a unique experience selling its array of products to satisfy the distinct tastes of its customers. It achieves this by constantly adding items to—and cutting items from—its inventory. Innovation is a staple at Trader Joe’s, and the company has made its reputation by making shopping for food a cultural event.
The Coca-Cola system has also practiced Drucker-like innovation over the past few years. Coca-Cola Enterprises discontinued its U.S. bottling operations, the Coca-Cola Co. integrated those assets with its North American unit to make improvements, and through its non-carbonated acquisitions and creation of a new FreeStyle fountain platform, added new products and services that were needed by its customers. It has truly innovated the Drucker way by stopping, improving and starting—all at the same time.
So, what can be learned at your company? Through Drucker-based reinvention, your company will benefit from translating your vision into a clear direction that customers can see, a focused product and service offering that customers prefer, an efficient operating system that customers depend upon, and meaningful human relationships that customers trust.
The key to success? Don’t feed birdseed to your cat. It’s much better to innovate the Drucker way by stopping what’s not working, building upon what is, and creating new products and services that your customers are asking for.