Securing resources to invest in innovation and research can be a challenging task, as it is not possible to commit to results within a defined timeframe. Therefore, for companies, it is often easier to opt for more predictable investments — those that offer a lower sense of risk and provide greater comfort when making decisions.

Repeating over and over what is already done well sounds more reasonable than betting on something that may or may not deliver the expected results. However, this is a dangerous position in the long run, it might be riskier to keep exploiting what a company already does well than to venture into the search for new opportunities, even if that means learning to live with a certain level of uncertainty.

Thomas Edison (with his direct current), Blackberry, and Blockbuster are just three examples of what can happen when companies stop innovating and focus exclusively on exploiting products and/or services that were once successful. In fact, that misinterpreted success can lead companies into a comfort zone that prevents them from considering the risks posed by competition.

Believing that what has made us successful so far will continue to guarantee our success in the future is a fatal mistake especially when we take two key aspects into account:

• The market is a living entity it changes, evolves, and constantly generates new demands.
• Technology offers new and better possibilities every day.

A new player entering the market today and deciding to create a product that competes with mine will have a good chance of surpassing it mainly because they will have access to fresh market insights and better technology. Most likely, they will develop a product that is far superior in quality and significantly lower in price the worst possible combination a competitor could offer against my interests.

Should we fully embrace innovation?

It’s not about becoming a full-time laboratory, nor about turning innovation into a rule or a religion. Many projects have been lost in that world of innovation for the sake of innovation. It’s about innovating with clear goals — goals that are set based on the values the market is expecting, and that change from time to time. It’s not about innovating just because it’s trendy or to satisfy personal whims; it’s about practical innovation — driven by the purpose of giving our customers the answers they are looking for, even before they know how to ask the questions.

So, innovate or exploit?

The answer is both — in balance. A healthy coexistence in a constant cycle between the exploitation of the products and services we have developed (which will provide us with the financial leverage we need), and the innovation that will allow us to stay relevant, face competition with better chances, and ensure the continuity of our business.