The Leadership Insider network is an online community where the most thoughtful and influential people in business contribute answers to timely questions about careers and leadership. Today’s answer to the question: What’s the best way to keep your company successful? is written by Daniel Saks, co-CEO and co-founder of AppDirect.
The best way to keep a company successful is simple—innovate. When companies create new products and services that are well-timed to meet growing customer needs, success is practically guaranteed. If only it were that easy, right? The day-to-day of running a company can be hard enough, but the added pressure of outpacing the competition with a steady stream of new offerings can be a lot for any business to handle. Companies are often founded around a single great idea, but driving growth through constant innovation is critical to success.
Does this mean you have to sit around, anxiously awaiting inspiration for your next amazing product or service to strike? Hardly—in fact, innovation is a discipline that can be practiced and improved. If creativity can be strengthened like a muscle, as the familiar saying goes, then so can innovation. At AppDirect, we are acutely aware of the need to get to market with new solutions as quickly as possible. To do this, we’ve developed a strategic framework to help us exercise our “innovation muscle.”
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Our framework is broken out into three main phases: alpha, beta, and scale. Our alpha phase is dedicated to exploring new ideas. We have teams of people who are always brainstorming new ways to use our existing technology, as well as developing new solutions. At this stage, we do a lot of testing to measure a range of factors, such as customer demand and market fit. Sometimes our ideas don’t work out, but that’s okay; in the alpha stage, failure is a sign that we’re truly pushing the boundaries of what’s possible.
Next is the beta phase, where we set out to prove the metrics behind ideas that have passed the alpha test. Here we determine the baseline numbers that will drive success. What is the customer lifetime value? What is the right customer acquisition cost that will justify overall development investment? You need to invest time and research into getting these estimates as accurate as possible. Faulty assumptions can quickly derail a new idea.
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Finally, the scale phase is when we aggressively invest resources into a new offering. Some companies will go straight from great idea to scale, but for us, it doesn’t make sense to pour sales and marketing dollars into promoting a product or service with no clear market or metrics. Guided by our framework, however, we can more easily predict the type of results we should expect. With these guideposts, we can focus our resources where they will have the greatest impact.
Bear in mind, a framework alone is a not cure-all. You’ll also need to onboard your entire company around a growth strategy. From day one, back when AppDirect was just my co-founder Nicolas Desmarais and I working in an apartment, we had a clear strategy for growing our company into new areas. When you combine strategy with innovation, you have a killer combination that will give you a sizable advantage.
At any given time, we have dozens of ideas moving through the AppDirect innovation framework. Not every idea will be a winner, but we’ve already used this approach to extend our platform in new ways, from broadening our focus to increasing our global presence. Just like exercise, building your innovation muscle takes time, commitment, and discipline. It won’t happen overnight, but if you stick with it, the pay off will be well worth it.
Read all answers to the Leadership Insider question:What’s the best way to keep your company successful?
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