The ‘Profitability Ninja’ & The ‘Samurai of Innovation’
Last week I posted the first part of a series of guest blogs sharing the article “Creativity vs. ‘Innovativity'” by Frank DeRaffele. Below is the continuation of where the article left off last week.
“Creativity vs. ‘Innovativity'” by Frank J. DeRaffele Jr. ( . . . Continued — CLICK here to read Part 1)
So how do we save ourselves from this Ninja? Enter the Samurai of Innovation. This Innovative Samurai (dressed in white, by the way) cuts through the creativity and reveals Innovative Thought, Innovative Ideas, Innovative Profitability.
Innovation is the good twin of creativity. Innovation is creativity with focused and applied business value. It knows how to see, analyze, evaluate, measure, and decide if this creative thought is able to become Business Innovation or if it will stay as Creative Waste.
As creativity is both a strength and a weakness to us as small business entrepreneurs, we must learn and develop the skill of how to take our creative thoughts and see if they can become innovative bottom line value.
A creative thought may be a wonderful idea but it has no direct relation to a solution. Not that it is not of value, because it may have great value, but it may not be of value NOW. When it is not of direct value, we open the gate for our Profitability Ninja to enter. The question is, how do we define value? In its most simple form, we can answer this question by asking — Does this creative idea relate directly to a current problem that we have and will it help us solve the problem in the way we would like?
For example, let’s say you own a retail store. You measure your success by the number of transactions you do on a daily basis and by the dollar volume of each transaction. Currently you are very happy with the number of transactions but you would like to increase your average dollar per transaction. Most customers that purchase from you spend an average of $55.00 (USD) per transaction. You would really like to get that number up to $65.00 (USD) per transaction. This means we need to look at up-selling, cross-selling, and the packaging of products. As you start to think about this, you come across an idea of a great new way to do a direct mail piece to a new target market. You know that if this new direct mail piece works, you will attract a new client base to your store. This new client base is exciting because you haven’t focused on new target markets for quite a while and by expanding into . . . WAIT A MINUTE! What does this have to do with increasing your average dollar per transaction?! The answer is . . . NOTHING.
What just happened here? Yes, it was the Profitability Ninja. He snuck in and started you thinking down a new path. He got you to come up with a great new idea and while getting excited about that idea, he made you forget that your real problem is Average $/Transaction . . . NOT Number of Transactions. Do you see what I mean? This new idea may not be a bad idea–in fact, it may be a good idea . . . however, it is not helping to solve the current problem at hand. By not keeping your focus on Direct Resolutions to your problem, your profits will go into the red.
Come back next week to read the final installment of Franks article, “Creativity vs. ‘Innovativity,” and learn how to recognize ‘innovativity’ to maximize benefits from creativity and help your business soar. As always, if you have a comment to share, I’d love to read it so please leave your thoughts in the comment section.
2 thoughts on “The ‘Profitability Ninja’ & The ‘Samurai of Innovation’”
Such a big difference that so many miss. Thank You for the insight Chapter Education to tomorrows meeting. Carol