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Innovate or die is the mantra at today’s enterprises, and it’s clear to see why: Many of the giants of years past have fallen into obsolescence by failing to adapt to new technology quickly enough.
Consider the fate of Research in Motion, whose BlackBerry mobile phones fully dominated the market until the mid-2000s, but ultimately proved to be no match for the iPhone and its innovative market-sourced app marketplace. After a disastrous 4-day service outage in 2011, the already-struggling company lost 75% of its value, and in 2016, the company finally folded its smartphone manufacturing operations, though it still licenses the once-powerful brand name to offshore manufacturers.
This isn’t an isolated incident: Just 12% of the companies that made the Fortune 500 list in 1955 still appear on it in 2016.
So what gives that fraction of companies the staying power they need to survive in rapidly changing industries? The foresight to understand what’s coming, and the drive to innovate.
Here’s a look at four companies who’ve stood the test of time through adapting to the market with new technology:
Born of a merger between Thomas Edison’s Edison Electric Light Company and the competing Thomson-Houston Co., General Electric was built as a company focused around innovation—so, while electric light-related products were its initial offerings, it quickly grew from there to develop a broad range of products powered by electricity, from toasters to ranges to washing machines.
From its earliest incarnations, GE aggressively worked to build both B2B and B2C applications for its products, aiming to reach the widest possible audiences, and taking advantage of new technologies to enhance efficiency and drive new innovations, from television to jet engines to nuclear power.
In recent years, GE has wholeheartedly embraced the potential of connected devices with the launch of GE Digital, which includes B2B products such as Predix, a system for real-time analytics and monitoring of a company’s assets. GE is using technology to build a safer, more efficient workplace and reduce the need for reactive maintenance. This approach helps not just GE’s own brands, but the global workforce as a whole.
Procter & Gamble
This company best known for its household cleaning products, such as the laundry detergent Tide, spends nearly $2 billion annually on R&D—at least double what its competitors spend. P&G uses its research budget to study its consumer base intensely: to understand not only what products would improve their lives, but how they can access those products with the least possible friction.
Case in point? P&G was one of the first adopters of Amazon’s Dash button system, which enables consumers to re-order products with the simple push of a button. When a consumer notices he’s low on Tide Pods, he can simply press the Dash button attached to his washing machine to get a new shipment within a couple of days from Amazon—no computers or credit cards needed.
Thanks to their early integration, P&G products account for about a third of all Amazon Dash orders, which are placed approximately four times a minute. This is a huge win for P&G in terms of brand loyalty: Another product line that uses Dash, Cottonelle toilet paper, found that customers doubled their bath tissue-budget with the brand in the post-Dash era. By taking an early lead with technologies like Dash, P&G is proving that, while it may be based around household staples, it understands how to innovate.
Founded more than 160 years ago by the inventor of the first safety elevator, few companies have had a bigger influence on modern architecture than Otis Elevator. Before its mass effort to bring safe elevators to urban buildings everywhere, few buildings were more than 7 stories high—but after Otis, they could stretch towards the sky. The company has kept pace with technology, ensuring safety at every stage—it’s now responsible for moving an estimated two billion people a day.
Otis is now focused on collecting sensor-driven data for all of its elevators worldwide, so that it can instantly track data around the health of its equipment, and conduct predictive maintenance to prevent future system problems. It’s partnering with AT&T and Microsoft to build an advanced data collection platform, with the goal that all of its 31,000 elevator technicians will have the tools at their disposal to solve problems faster. This historic company is showing how IoT can innovate an age-old industry.
Starbucks may have started out as a coffee company, but today, it’s a technology company.
For the last decade, the company has been investing heavily in a digital strategy to connect to customers through mobile—and it’s been paying off significantly. Starbucks has built a world-class customer loyalty program that gives them the tools to track customer purchasing behavior and reward customers as they spend. They’ve also managed to reduce line-waiting time by enabling customers to order online—today, 30 percent of orders take place on mobile, with 9 percent placed in advance.
Starbucks is now focusing on using its data to inform even better customer experiences, creating AI-driven personalized rewards for segmented groups of customers based on their past behavior and other factors, such as weather, time of day, day of the week, and special events, like birthdays. Is it snowing? A free latte might be the ticket to lure a customer into the store—while on your birthday, a free cake pop might be in order. Starbucks’ “digital flywheel,” as the brand calls it, has helped keep the company achieving stable growth while many other retailers have downsized or shut their doors.
While many companies crash and burn over the years, these four exemplify how adapting to fit the market—rather than hoping the market will return—is crucial for building a long-term, sustainable business. Make innovation a core part of your business DNA, and you’ll be on your way to building the next great 200-year old company.