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What is innovation?

WHAT DETERMINES SUCCESS OR FAILURE IN BUSINESS?

“When life gives you lemons, make lemonade.” When you are dealt a setback, change it into a positive advantage.

Setbacks often lead to innovation.

To innovate, you don’t need to invent something new; rather, just come up with a better or novel way to use the resources you have.Some companies succeed at innovation; others fail or do not even try. Wells Fargo is a perfect example of a company that reinvented itself. Wang Laboratories did not.

Some companies succeed at innovation; others fail or do not even try. Wells Fargo is a perfect example of a company that reinvented itself. Wang Laboratories did not.

THE SUCCESS OF WELLS FARGO

In 1852, Henry Wells and William G. Fargo, the two founders of American Express, formed Wells Fargo & Company to provide pony express and banking services to California. In 1860, the company extended its operation through the acquisition of the Pony Express. Six years later, consolidation united two more stage lines under the Wells Fargo name.

In 1918, as a wartime measure, the U.S. government nationalized Wells Fargo into a federal agency. The government took complete control of the express company. One would think that this was the end of the company. Rather, it rebuilt, changing its focus to commercial markets.

Wells Fargo grew and grew. Through mergers and acquisitions, the company expanded its banking business. Today, Wells Fargo is an American multinational diversified financial services company with operations around the world. After buying Wachovia in 2008, the bank grew even bigger. It is now the fourth largest bank in the U.S. by assets and the largest U.S. bank by market capitalization.

THE FAILURE OF WANG

Wang Laboratories was a computer company founded in 1951 by Dr. An Wang, who remained at its helm for the entire existence of the company. At its peak in the 1980s, Wang had annual revenues of $3 billion and employed over 33,000 people.

The company began by manufacturing typesetters. Its first product was developed under contract to Compugraphic, who retained the rights to manufacture without royalty. They exercised these rights, effectively forcing Wang out of the market.

Later, Wang branched out into calculators and word processors. It produced the first desktop calculator capable of computing logarithms, quite an achievement for a machine without any integrated circuits. Then came the Wang 1200, a dedicated word processor.

The operator of a Wang 1200 typed text on a conventional IBM Selectric keyboard. When the Return key was pressed, the line of text was stored on a cassette tape. The stored text could be edited, deleted and skipped.

The labor and cost savings of this device were immediate, and remarkable. The Wang 1200 and the products that followed revolutionized the way typing projects were performed in the American workplace.

Wang thrived. Its profits soared. It was one of the first computer companies to advertise on television, and the first to run an ad during the Super Bowl.

Then failure. The market for standalone word processing systems collapsed with the introduction of the personal computer. Wang did introduce a computer-based word processor. However, by the time it appeared the PC, with the ability to combine word processing with other programs, had rendered a specific task machine largely unsellable.

THE MORAL OF THE STORY

Our businesses can learn from these case studies in failure and success. Change is inevitable. Like evolution in the natural world, businesses must evolve and adapt to change. It is up to us to stay ahead of the curve and anticipate what change will occur and reinvent our companies to meet the challenge.

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