Not Innovating = Destruction

It is sure that any form of innovation can take your company to a higher level. It may bring the market leadership to your company. But it is equally important to do sustain innovation. Innovation once done and then cling to that, will not result in milking the cow in future. Instead it destroys what you have innovated.

A market leader has enough fund to spend on innovation. It continues to be the market leader (using established technology), with the additional cost incurred in innovation. But after some time, it will reach a point where further investment will not bring any difference. This is because the existing market leader may think that their opponents are not in a position to challenge them. Also there is limitation in the technology it is using. It cannot afford the new technologies as time and investment progresses. But the reality is start-ups(new rival) can challenge the market leader (‘The S-Curve: An established technology and new rival’, Managing Creativity and Innovation, HBR). Start-ups do not have anything to lose. And they will always invest new technologies. Here the challenges are they will start a little bit late and have to invest more in new technologies. The other side of these challenges are advantages. Starting late in an innovation project enable them to use the latest technology. Also using latest technology will leverage their innovation and business. That means even if you are innovating, but with existing technology will face competition from new rivals who are using latest technology. Then think of what will happen if you are not innovating at all!

A best example for an established company which innovates all the time is Apple. As a result, they were able to come up with different innovative products like iPod, iPhone etc. But coming to cell phone market, Motorola could come up with MotoRazer, MotoYuva etc. Even then they are not able to keep innovation as that of their competitors and hence are forced to move down in the sales of cell phones. A great vision is always required for innovation. If you failed in having a greater vision at any time, will result in lack of innovation. This eventually falls your revenue. To sum up, not innovating over a period of time is harmful for the organisation.

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Social Responsibilty of IPL

Indian Premier League (IPL) is the one which shares the first page of every news paper with terror attack and other crime news. After a month, when four teams are entering into semis, it is clear that the initial hype and the publicity is reducing. But the sponsors do not want to lose even a small target customers. IPL is definitely a success in reaching the mass audience.

Coming to the finance aspect of IPL, it is clear that IPL is creating a huge power distance in terms of money. Those who have money are ‘investing’ to get it multiplied. But it is the medium- and low-income people who constitute 80% of the audience. These people are being exploited, directly through tickets and indirectly through advertisements.

The impact is rich people are getting more and more rich; and the poor, medium people make their case even worst. The only justification of those who are ‘investing’ is they are taking chances. But as long as sponsors are there, the risk of taking risk is negligible.

Does IPL has a social impact other than the entertainment value? The cheer leaders may or may not have an impact on the public. But I am not talking about it right now. I am focusing on the finance aspect – return on investment; to be precise, the social return on the investment made. Many are those who talk about Social Responsibility these days. IPL can be treated as a business. A small portion of its profit should be taxed and will be kept separately for rural development. This not only helps IPL by getting more publicity, but also the development of rural India.

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