Business of welding - Success through innovation

After a strong Canadian showing at the winter Olympics I started thinking about what it takes to generate gold medals, and what it takes to achieve success within our own industry. In sports, success comes as a result of training, drive and technique, with innovation being a key critical factor all share.

The act of “innovation”, making progressive changes, is one way to measure success but it’s worth noting that simply being innovative is no guarantee of success.

Simply making a change for the sake of change is always a risky move. To have a good chance at success, innovation needs to be to be tied to something larger; a goal, an objective – in our case increased revenue and market share. To help move this discussion along, I've categorized innovation into two types:

Progressive innovation

This is where a product or service evolves in stages to adapt to changing business needs. Most companies already do progressive innovation and likely don’t give it much thought. For most it’s just part of doing business and staying competitive. In progressive innovation, change happens at a very measured, incremental pace, allowing everyone equal opportunity to react and catch up regardless of where they are on the playing field.

In business this creates a “race to the bottom” scenario, as cost becomes the only real differential between competitors. Survival becomes a simple numbers game - with the companies that can operate on the smallest possible margins coming out the ‘winner’. The problem here is these types of wins do not always guarantee long-term business success.

History has shown that at some point, someone is going to change the playing field – and those without the capital to invest in R&D, workforce skills and new equipment or upgrades will be hard pressed to keep up.

Disruptive innovation

This is where a company takes a radically different approach to winning market share and in one big step change commonly held notions and ideas. It is no longer about moving the ball down the field, it about creating a whole new field, maybe even inventing a new game to play on it.

The goal here is to open up and lock up brand new markets, or dominate the ones you are in, or both!

When done successfully, disruptive innovation puts you in the “driver’s seat”, forcing competitors to react. As you might guess, not everyone is going to be able to react, or react fast enough – which means they will rapidly exit the market, opening up yet more revenue potential.

So how does someone get ‘disruptive’? Start by looking at your nearest competitors and who their customers are. Take the time to learn what these customers really want and how their needs are being serviced – you may be surprise to find out neither are what you assumed.

The next step is to get an understanding of your own situation with respect to what you have uncovered. You might want to look at quality systems like LEAN and assessment tools like the CWB Value Optimizer program as a starting points for getting a handle on your current state of business.

This is your starting position. READY, SET, GO!

Once you know where you stand, start thinking about how you can improve your position though expanded staff knowledge and certification/ accreditation, partnerships with other players, initiatives like capacity and skill sharing agreements (within and outside your current market) and other key business activities.

Also think about things like improved access to materials, transport, grants and tax breaks, training funds and expanded labour pools.

This kind of thinking might lead you to some interesting possibilities.

Being disruptive is also tied to your willingness to invest. If you are going to invest, then invest in technology, training, partnerships and business processes (don’t forget marketing!) that will put the maximum distance

between you and the competitors.

Alternately, maybe the right thing to do is invest in your competitors – partnering with them to create a more competitive team. Regardless, the key is doing something different that makes a big impact in the market.

Don’t run immediately to the obvious options based on what you think you know, and don’t just invest in a newer version of what you already have. Look at what is available in the market and measure this against what your customers need now and in the future.

If by switching focus, partnering and or jumping a technology generation ahead of everyone else results in delivering superior value to the customer – then you are likely looking at the fastest way to the finish line.

Finally, it’s worth noting that doing the bare minimum may keep you in the game – but for how long?

Clearly being disruptive comes at a cost, but so does doing nothing. Ask yourself is are you playing to win, or just standing on the sidelines hoping the action will head your way … sometime … maybe … ?

As always, reach out for help when you need it. The CWA and CWB Group are here to help grow the Canadian welding and joining industry and are just a call away.