Innovation is a better way to deliver value. Often it doesn’t require inventing anything new, just recombining existing capabilities in new ways. These are Paul Kaplan’s words from his Shuffle Up and Innovate post on BIF.
The post contrasts the (success) story of CVS with the (not so successful) story of Blockbuster. The difference between the two, as Kaplan points out is that CVS explores new ways to deliver customer value even if it requires doing business in a different way, e.g. expanding its thinking beyond a drugstore chain to imagine how to deliver value to their customers as a leader in the healthcare industry. This is what led them to acquire MinuteClinic and to merge with Caremark Rx.
On the other hand, Blockbuster didn’t look beyond its current store operations (or simply dismissed the opportunity to do so) while Netflix recombined existing capabilities to deliver new value to Blockbuster’s customers. The outcome is that Blockbuster is listed on U.S. News and World Report’s “15 companies that might not survive 2009.”
Innovation must be a constant. And as the CVS example points out, it’s often just a matter of looking at your business with a fresh set of eyes. Taking apart the puzzle and putting the pieces back together in new ways. Fact is, if you’re not thinking beyond your current business model, others are.