Bob's Gutsy Leadership Blog

What Do Apple and Netflix Have in Common?

Innovation is a topic that you hear a lot about these days.  How does it happen?  I think you can learn a lot by looking at examples that have occurred over the years that have had a truly significant impact.  Here are two classics:  Note how the leader had a very specific idea that he believed would have a very significant impact on the world.

Apple – When Steve Jobs returned to Apple in 1997, the company was in terrible shape.  Its products were floundering and they were running out of cash.  It wasn’t long before he came up with an idea which he thought would solve a big problem while also revolutionizing the world of personal, portable, music for the individual.

The problem at that time was Napster, a piece of free software that enabled teenagers to share all their digital music with one another, causing the music industry to be absolutely enraged because of the loss of royalty revenue.  In essence, these kids were stealing music.

Jobs dreamed of a very cool looking handheld device that could store thousands of songs digitally and be small enough to easily put in your pocket.  Individual songs could be easily purchased at a very low price from a digital music store and could not be transferred to other individuals.  The iPod was born and it basically revolutionized the music industry.

Netflix – Back in the year 2001, Blockbuster had over 3,000 stores, offering movies to rent on VHS tapes. All it took was a trip to a nearby Blockbuster outlet and people could watch movies in the comfort of their home.  They would then return the VHS tapes in the next day or two.

At that time, about 5% of households had a DVD player connected to their television and a single DVD could easily store an entire movie.  Reed Hastings and Marc Randolph described their dream to their small organization: a service that would enable people to rent movies on DVD’s by going online, checking a few boxes and having the DVD delivered by mail.  A return mailer was supplied and it no longer required the user to make the two trips to the local store to pick things up and return them.  The small Netflix organization delivered on the founders dream and Netflix was born.

Stepping back, what do these two leaders teach us?  Innovation seems to be most productive when the leader has a dream that solves a problem and/or provides a unique new benefit and that leader can describe exactly what success will look like.  Besides describing the dream, these leaders put fresh talent in place to come up with the innovation required to deliver the dream to customers.

Too often we see leaders of organizations simply waiting for the R&D organization to invent something.  Without the leader working with their innovation organization, and probing what dreams may be possible to invent, the probability of true innovation emerging gets significantly lower.

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