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Guest: Greg Coticchia, a coach at CEO Coaching International. Greg is a six-time CEO, award-winning entrepreneur, business leader, professor, and author with over 30 years’ experience in tech products and services.
Quick Background: Innovation is the lifeblood of a growing company. If you’re not continuously improving your products and services and exploring new marketplaces, you’re putting a cap on your business’ potential, and creating an opening that younger, nimbler, and braver competitors will march right through.
On today’s show, we explore Greg Coticchia’s process for mastering new product development and building a culture of innovation that will Make BIG Happen.
Keys to Innovation From Greg Coticchia
1. Define your innovation.
The Silicon Valley mantra of “move fast and break things” doesn’t have to be your company’s mantra as well. Nor do you have to dream up a revolutionary “game changer” every time you iterate your offerings. While your company should never shy away from taking BIG swings when appropriate, sometimes smaller changes can be just as innovative.
“There are lots of different types of innovation that are not based on technology,” Greg Coticchia says. “Innovation could be as simple as a product line extension, a new feature to an existing product. New categories of new products, certainly they get the headlines, they’re the press grabbers, and people flock to those. But that’s really not where the majority of innovation in companies happens. It’s really about how do I incrementally continue to progress the value proposition of the product or services I bring to marketplace.”
For example, integrating an AI Roadmap into your planning for the second half of the year could be an innovation that helps you gather the data you need to serve existing customers better while also exploring underserved corners of your market. You could innovate by adding a Chief AI Officer or Chief Experience Officer to your c-suite, upgrading your company’s tech prowess and the cumulative experience you’re providing to customers and employees.
Or, if you’ve been firing test bullets on a new product or service and the results have been encouraging, this might be the time to take the leap.
“I think, for some companies, total turnover of their offering line is important in the individual business they’re in,” Greg says. “But there’s no doubt that if you’re not bringing something new to bear to the market you serve, you will become lost in your marketplace. You will fall behind in your marketplace.”
2. Make innovation a core value says Greg Coticchia.
So why don’t more companies innovate consistently?
Fear.
Fear of failure. Fear of harming a profitable business. Fear of misaligning processes and goals. And, at an individual level, fear of sacrificing income or getting fired.
That’s why innovation has to be baked into your company’s core values, and championed by the CEO and team leaders.
“It’s very difficult for large organizations to take risks,” Greg says. “And that can even be true for older, small-to-medium size businesses who have a cash cow product or set of services. It’s very hard for them to say, ‘We’re going to try something new.’ Some of it has to do with this habit of what we sell and who we are, and some of it has to do with changing the behavior of selling something new or going to market with something new. You have to instill in the culture that the ability to test, try, and fail is okay, as long as you learn and as long as the failing isn’t fatal to the business.”
If innovation is a core cultural value, and if you have the data and people you need to take calculated risks, then the CEO can effectively eliminate “failure” from the company’s vocabulary. Your KPIs will identify wins that you should celebrate in a BIG way. And they’ll also alert you to misfires that you can pivot away from quickly, study, and learn from as you plot your next round of innovations. Google has launched and killed dozens of products over the last two decades. But their culture of innovation also made space for an engineer to create Gmail as a side project, which eventually became the cornerstone of an entire suite of office software that millions of people — and companies — now use on a daily basis.
3. Manage discoveries.
Greg Coticchia believes that the greatest innovation risks companies face are at the front end of their ideas. As leaders weigh whether or not it’s worth pouring fuel onto that initial spark, they need to follow their data and learn as much as they can about an innovation’s potential. They might also look to how competitors have followed their own bright ideas, successfully or not.
“Let’s get away from idea management and talk more about discovery management,” Greg advises. “And that’s an important difference because in discovery, you may have an idea, but you’re trying to discover whether or not ‘the dog eats the dog food,’ so to speak. Do elements of the idea really make sense? And can we change, modify, move forward? What do people really want? And so much of it, as we know, with new products can be timing, can be market acceptance.”
Take Apple’s ill-fated Newton. In the smartphone age, it’s hard to imagine a time when the public wasn’t ready for a palm-sized digital assistant. It took another company, Palm, to discover what Apple got wrong about early PDAs and repurpose what worked for a niche of tech-savvy businesspeople.
4. Innovate for the long run.
Of course, many of Apple’s own discoveries about the Newton eventually found their way into a more successful product: the iPod media player, which, in no small part, saved the company.
And what did Apple do with the iPod? In less than ten years, they released a product that essentially killed their cash cow.
“Steve Jobs brings out the iPhone, and it kills the thing that saved the company,” Greg says. “I think there are very few leaders, very few executive teams, very few companies that have the appetite to do something quite like that. But if they hadn’t done it, could you imagine trying to sell an iPod in 2024? They’d have been out of business a long time ago and all that greatness and innovation and design wouldn’t matter. They saw it coming. And what was the hallmark of the iPod? That wheel. They didn’t take any of that and move it over to the iPhone. They took an entirely new design, which is also even more risk. So they went into a different business with more risk, with a different design, and they killed the fatted cow.”
But Apple’s bold plan didn’t happen in a vacuum. The iPhone’s hardware innovations synched almost perfectly with concurrent advances in digital media and wireless internet.
Netflix’s timing wasn’t quite as perfect when it tried to kill its own cow by spinning off DVD rental by mail into a separate service. Its customers weren’t ready to embrace the all-streaming, all-the-time future that Reed Hastings knew was coming. Netflix quickly pivoted back to its beloved red envelopes … for a while. But by the fall of 2023, the combination of tech and consumer habits caught up to Hastings’ vision, and the company’s killed its DVD-by-mail business for good.
In retrospect, Netflix’s willingness to experiment with how it delivered content was probably a minor failure whose discoveries translated into its BIGGER successes. Ultimately, Hastings was right about where media was headed. And along the way, Netflix prepared its customers to embrace that vision and built a powerful workplace culture that prided itself on innovation and continual improvement. If your company can point toward that kind of inspiring future, eventually, the right customers and talent are going to follow you all the way to BIG.
“At the end of the day, if people see that, in your business, you’re giving them exciting, fun, interesting, things to do, and you’re allowing them to fail in a reasonable manner, that’s the kind of culture that people want to go to work for,” Greg says. “That’s a place where they say, ‘Hey, this is fun. I feel valued. I feel like I make a difference. Not only am I giving something that makes a difference, I’m learning something.’ We all like to make a good paycheck. But when you’re able to both give something that you feel is valued and you’re able to learn something that makes a difference, those are the best jobs in your life.”
Top Takeaways From Greg Coticchia
1. Take risks that your competitors might be too afraid to take.
2. Kill your cash cows rather than trying to milk them dry.
3. Anticipate where your business is headed and put the people and processes in place that you need to realize that vision.
Links:
“Building High-Performance Teams” – At our 2019 Make BIG Happen Summit, Netflix’s Patty McCord spoke about how to provide better feedback that drives better team performance.
7 Strategies to Create a Culture of Innovation That Drives Growth and Profits – CEOs who champion innovation as an essential cultural value can inspire their companies to start sprinting out ahead rather than following.
About CEO Coaching International
CEO Coaching International works with CEOs and their leadership teams to achieve extraordinary results quarter after quarter, year after year. Known globally for its success in coaching growth-focused entrepreneurs to meaningful exits, the firm has coached more than 1,500+ CEOs and entrepreneurs across 100+ industries and 60 countries. Its coaches—former CEOs, presidents, and executives—have led businesses ranging from startups to over $10 billion, driving double-digit sales and profit growth, many culminating in eight, nine, or ten-figure exits.
Companies that have worked with CEO Coaching International for two years or more have achieved an average revenue CAGR of 31% (2.6X the U.S. average) and an average EBITDA CAGR of 52.3% (more than 5X the U.S. average).
Discover how coaching can transform your leadership journey at ceocoachinginternational.com.
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