Why is innovation so difficult? This is my understanding after studying several companies.

The author studied several companies and found some common patterns, which led to the idea that both companies and individuals should have sustainable capabilities. I hope this will be helpful to you. Let's take a look.

I recently studied several companies and found some common patterns.

In the early years of the company's rapid growth, we continued to expand our product categories and markets. From 1 billion to 10 billion and then to the IPO, it felt very smooth.

After a few years, the growth rate stopped and the curve went downward.

01

After careful analysis, it was found that the problems encountered by these companies were very similar.

Because consumer habits have changed, competitors have changed, and sales channels have changed. But we can’t keep up, can’t turn around, and can’t innovate.

For example, the problem that Want Want is facing is that consumers pay more attention to health than they did 20 years ago, competitors have added milk tea and nuts, Douyin and takeout have been added to sales channels, and the consumption scenarios for New Year gatherings have also become less due to the epidemic.

From this perspective, is the problem we are facing serious?

02

Times are changing, and the structure, roles, and relationships of supply and demand are changing.

This requires companies to adapt to these changes and be prepared to respond, otherwise they will definitely fall behind and fail. There are too many companies like this.

However, it is very difficult to ask these companies, which are used to winning battles, to subvert themselves and innovate.

The difficulty lies in the core management, who feel that they should innovate.

But when I looked back at the company's financial statements, I saw that the revenue scale and profits were still there. Then I looked at my account and saw that my stocks were still there. Finally, I looked in the mirror and found that I was middle-aged and had half a head of gray hair. What was there to innovate? So I left it at that.

03

Many companies have experienced this trend and phenomenon. If we extend the time frame by 10 or even 20 years, the reason is this: the initial high growth was due to certain competitive advantages at the time.

For example, you can choose the right categories and take advantage of the situation; or you can be good at online marketing and figure out Taobao while others are still opening physical stores.

Relying on its competitive advantages in certain areas and the right time and place, it has achieved rapid growth.

Over time, the advantage will be lost.

04

The landscape 10 years from now will be a completely different game, requiring companies to come up with new skills, test their comprehensive strength, and demonstrate their capabilities in all aspects.

Unfortunately, the company only knows the same old things from 10 years ago, with no new skills, and no desire or ability to learn.

Slowly it hung up.

05

Look at yourself and the people around you, the same principle applies.

I have seen many people achieve rapid results in just one or two years, get promoted in large companies, or make progress in starting a business. This is because they have just encountered their own competitive advantages and are releasing them.

Release, in other words, is consumption.

If a person cannot continue to absorb new nutrients and learn new skills while consuming resources, he will soon fall behind.

Whether you are looking at yourself or others, don't focus too much on short-term results. You can run like crazy for a while because you have hit several links.

But in the long run, we still need to have the ability to sustain.

The above is my recent thinking.

Author: Han Xu

Source: WeChat public account "Operation Dog Work Diary (ID: yunyingriji)"