The Merriam-Webster dictionary defines “retail” as, “to sell in small quantities directly to the ultimate consumer.”

The dictionary doesn’t stipulate the size of the store, or even that you need a physical store at all. And this something that many “big box” retailers missed. They were operating on the “If you build it they will come” mentality, which worked for a while – but now it’s not. Last year, sales and profits declined at Toys R Us; Best Buy is closing 50 stores following a fourth-quarter loss of $1.7 billion; and even Walmart performed below analysts’ expectations last year.

The problem: many of these companies have underestimated the changes happening around them. Or as a true student of innovation might put it, they’ve been afraid to make their physical stores obsolete, and now they’re being forced to play catch-up.

If your business doesn’t try hard to make its processes obsolete, someone else will. Businesses, brands, business models and platforms all evolve – creating a need for continuous innovation. In big retail, innovation must focus on developing the right mix of platforms – bigger stores, smaller stores, kiosks, and digital storefronts that you access through your computer, tablet or smart phone – all enhanced by value-added services, education, and the building of dedicated “communities” of engaged customers and other stakeholders.

Can Toys R Us, Sears and Best Buy remain in “retail”? Yes. If, as with any good brand, they develop the right brand platform and a clear brand promise to the customer that differentiates, simplifies and builds trust.

Ten years ago Walmart was supposed to take over the retail world. Now, the Beast of Bentonville is starting to show stress fractures, and online retailer Amazon, with a net sales increase of 40% in 2011, is the new world beater. It’s time for the chains to focus less on what other retailers are doing, and more on what they are not doing: not clearly defining and supporting a customer value proposition.

Toys R Us, for instance, needs to revisit its value proposition and reimagine what it can do for consumers. Can and should it continue to bring toys and baby stuff together (to address the child lifecycle under one roof)? If it’s going to continue selling safety gates and other child-security accessories, should it also provide seminars on child safety, child care, or learning and development? Maybe it can convert some of its surplus space to indoor play areas and party rooms to promote children’s exercise and health. (Maybe it could even host baby showers!)

There is no shortage of innovation opportunities and possibilities. But nothing starts without a vision and a clear commitment to the customer.

Innovation is about bringing ideas to market rather than letting them languish on a half-forgotten scratchpad. And innovation doesn’t necessarily mean invention. More often, it’s about acting on an opportunity you have already recognized, or adapting existing solutions for other markets or industries.

How simple can innovation be? Consider these examples:

Seeing the same thing in a different way
Think of the publicity coup for Post’s Shreddies – and its 18-point gain in market share – when it reintroduced the timeless breakfast cereal in diamond shapes rather than squares.

Exploring new markets with the same products (or slightly adapted features)
Toy giant Lego has launched a “Lego Friends” brand to target girls in addition to its dominating “boy brands,” such as Star Wars Lego and Lego Ninjago.

Tapping into (or teaming up with) new market trends
Hyundai now provides a multimedia tablet as an owner’s manual instead of the traditional printed book.

Bringing together features from existing products or markets to create something “new”
The maker of SLAP Watch offers a unique twist on silicone watches with interchangeable faces, bright colours, and spring-coil bracelet – all in one item.

Innovation is the engine that drives your business forward. Think about it: customers are engaged by new and exciting products and services. It gives them something to talk about, a reason to buy again, and more often.

You wouldn’t change the oil in your car just once a year – the engine would sputter and die. Your company shouldn’t leave ideation, innovation or the introduction of new – even small – improvements to an annual schedule. Without the tune-up of continuing innovation, your business will also sputter and die.

Have we seen the death of the Twinkie? If urban legend is correct, they can survive just about anything … except, maybe, a change in consumer culture.

Hostess Brands built its success around the development of sweet, indulgent snack foods, from its original chocolate cupcakes to the cream-filled shortcake Twinkie. James Dewar, who invented Twinkie in 1930, called them “the cream puff of the proletariat.” But something has changed. The proletariat began to realize that they wanted to live longer, healthier lives… fighting the sweeping epidemic of obesity, not dying from it.

Contrast Hostess with Pepsico, whose CEO has announced her objective to generate 50% of company revenue from healthful food. Pepsico embraced the new wave of health-conscious thinking and made it a corporate crusade. They have diversified into snacks and drinks that support today’s active lifestyles, through Gatorade, Quaker, Aquafina and more.

With Hostess’s parent company filing for bankruptcy protection in January, the respective failure and success of these two companies couldn’t be more dramatic. But it hinged on one minor difference. Pepsico looked and listened and recognized that while change is all around us, one thing doesn’t change: The customers know best. Don’t ignore what they’re telling you.

Mea culpa.

As a relentless cheerleader for innovation, I have harped on its importance as a stimulus for competitive advantage and organic growth. What I may have forgotten to tell business owners is that innovation is also fun.

It’s the coconut-cream pie after dinner. It’s the trip to the toy department after buying socks and underwear.

Spending time with entrepreneurs has taught me that they share a desire to create something new. An essential strand in their DNA compels them to cause a disturbance by shaking up their marketplace and filling a void. But my sense is that some entrepreneurs tend to lose that killer instinct as their role evolves from disruptor to operator and manager. They spend more time and energy doing what they have to do rather than what they are wired to do.

Instead of guilting business owners into embracing innovation, I’m going to remind them that their instinct for discovery and disruption is the reason they became entrepreneurs in the first place. Big ideas made them happy. And big ideas can put the bounce back into their step, and the rev in their revenue statements.

It’s never a bad idea to do what you’re best at, and what you love to do.

To all the entrepreneurs chained to their desks and baffled by their own bureaucracy, my suggestion is simple: offload a bunch of operational responsibilities onto someone who loves them, and focus your passion on the next epiphany or invention that’s pinging around in your right brain.

Even if an idea doesn’t turn into a full-fledged profit centre, the discovery process will energize you and infect the people around you. Once you reassert yourself as your company’s chief innovation officer, you’ll inspire your team to start thinking about possibilities, rather than simply punching in and out.

We all know what innovative cultures can do. You’ve seen companies such as Google, Apple and Virgin thrive and grow under the leadership of original thinkers. You’ve seen upstarts such as Under Armour and Spanx shake up the stodgy underwear industry, with the leaders of both companies recently vaulting onto the latest Forbes magazine “billionaire’s list.”

Give yourself and your people permission to imagine and explore new ideas – even if they’re only process improvements. Questioning the status quo is always beneficial. By rediscovering your own eureka muscles, you can lift the spirits of your people and your business’s bottom line.

You’ll have more fun and your people will feel more invested in the company.

Special to The Globe and Mail

Even if your marketing budget is  tight, there’s plenty you can do to build your business. Networking is one of the most cost-effective ways to win new business. Often, it won’t cost you a dime, but to reap the rewards, you have to weave it into your daily business activities.

Here are five types of contacts to make in the coming months.

1. Smart people in other industries

People in other industries can alert you to best practices that you can bring to your own arena.

“It’s about exchanging information,” says Ken Tencer, CEO of Spyder Works, a branding and innovation firm in Toronto and New York. He is co-author of The 90% Rule, which looks at how to evaluate and effectively act on business opportunities.

How do you find the right people to add to your brain trust? Ask yourself who to exchange information with that would benefit yourself and your business, says Tencer. Don’t know many professionals outside of your field? Join a high-level networking group, such as Vistage, that puts you in the same room with CEOs from unrelated industries.

“It really opens your mind,” Tencer says. “It gives you feedback on what you could be doing differently, by learning from best practices in other areas.”

2. Amplifiers

To spread your company’s message, get to know like-minded industry thought leaders, journalists and social media users with a significant following. These people will help you reach their audiences, says Tencer.

You don’t have to meet such contacts face-to-face to build a strong working relationship. One good way to meet amplifiers, says Tencer, is by offering useful information based on your professional knowledge. Post to social networks such as LinkedIn.

3. New prospects in growing industries

A good 44 percent of small business owners expect economic volatility to make it harder to reach their business goals for 2012, according to the Guardian Life Small Business Research Institute.

You may lose some sales to clients who are in bad financial shape in today’s economy, but you can compensate. Add new customers who are in thriving industries.

It’s not likely to happen by accident.

“If you want to be in health care, make it a point to do some homework,” says Andrea Nierenberg, author of Nonstop Networking. She is president of The Nierenberg Group, an executive training, recruiting and consulting firm in New York.

Identify key players in the market you want to reach, and make a plan for contacting them, perhaps through a site like LinkedIn or with introductions from professional contacts.

4. Savvy suppliers

When you buy products and services, take the time to ask your suppliers about what they’re seeing in the marketplace. Consider inviting one or two to your office this year to make a brief presentation.

“They can definitely tell you about trends they have seen in your industry and in parallel industries,” says Tencer. Suppliers who do business internationally can offer a particularly comprehensive perspective.

5. Friends of friends

Forget the old taboo against mixing business with pleasure. Your social circle, from lunch mates at the office to high school friends, can be a great source of referrals. This works as long as they are familiar enough with the quality of your work to recommend you confidently to their contacts.

How do you foster unsought referrals? Be a recurring source of help to others in your personal, professional and volunteer networks. When you pass along a job lead or make introductions to a potential client, says Nierenberg, others will naturally want to reciprocate.

If you’ve lost touch with a friend, Nierenberg suggests that you set up a Google alert with that person’s name. News clippings and blog posts that pop up may give you conversation starters to use in an e-mail. Of course, if a buddy makes a valuable connection, you’ll want to take them to lunch or send a small gift.

“The better the relationships you have with people, the more likely they are to make introductions for you,” says Nierenberg.

Elaine Pofeldt is an independent journalist specializing in entrepreneurship. Her work has appeared in TheAtlantic.com, BNET, Crain’s New York Business, CBS Moneywatch, Good Housekeeping, Inc., Working Mother and many other publications. A former senior editor of Fortune Small Business magazine and editor of its website, she does editorial consulting for online and print publications.

Image from a Shreddies campaign in 2008

When I ask business owners and managers about innovation, many of them talk about ideas they have percolating but they have never pursued.

They’re too busy fighting front-burner issues to think about anything new. But if innovation is going to be a source of new products and revenues, I have three words for you, from one of the world’s most innovative companies: Just Do It.

t’s as simple as that. Innovation is about bringing ideas to market rather than letting them languish on a half-forgotten scratchpad. And innovation doesn’t necessarily mean invention. More often, it’s about acting on an opportunity you have already recognized, or adapting existing solutions for other markets or industries.

How simple can innovation be? Consider these examples:

Seeing the same thing in a different way

Think of the publicity coup for Post’s Shreddies – and its 18-point gain in market share – when it reintroduced the timeless breakfast cereal in diamond shapes rather than squares.

Exploring new markets with the same products (or slightly adapted features)

Toy giant Lego has launched a Lego Friends brand to target girls in addition to its dominating “boy brands” such as Star Wars Lego and Lego Ninjago.

Tapping into (or teaming up with) new market trends

Hyundai now provides a multimedia tablet as an owner’s manual instead of the traditional printed book.

Bringing together features from existing products or markets to create something “new”

The maker of SLAP Watch offers a unique twist on silicone watches with interchangeable faces, bright colours, and spring-coil bracelet – all in one item.

Innovation is the engine that drives your business forward. Think about it: customers are engaged by new and exciting products and services. It gives them something to talk about, a reason to buy again, and more often.

You wouldn’t change the oil in your car just once a year – the engine would sputter and die. Your company shouldn’t leave ideation, innovation or the introduction of new – even small – improvements to an annual schedule. Without the tune-up of continuing innovation, your business will also sputter and die.

You should make 2012 the year that innovation becomes a continuous, front-burner activity, just like sales and marketing.

How do you take the first step in your business? Set aside a 15-minute slot in your weekly sales and marketing meeting. Ask everyone at the table to talk about one interesting innovation they have seen in your industry, or better yet, an industry far from your own. Discuss which examples are most applicable to your business, then charge a person or team to flesh those ideas out. Monitor their progress monthly in the same team meetings. Success breeds success, and feedback and inclusivity are its lifeblood.

Winning through innovation doesn’t have to be scary, painful or expensive. Business owners and managers can do it step by step. Start by creating an environment in which employees, trusted partners and even customers offer great new product and service ideas. The active ingredient in “win-novation” is simply creating a process to examine those ideas and pursue the best of them.

The cost is low, the potential sky-high. It’s better to implement a number of smaller innovations than to have big ideas and do nothing with them.

by Ken Tencer
Originally published as a Special to Globe and Mail Update, Wednesday, Dec. 07, 2011

With Dyson’s new bladeless fans, generation of kids will be denied the chance to stick pencils through screens to see what happens when they touch fast-spinning blades.

For any other reason, you have to love the British-based company because its innovations are so obvious yet so breakthrough.

• Safe, bladeless fans that move air without all the rumbling and rattling.
• Technology patterned after jet engines.
• Dual-cyclonic vacuums that suck up more dirt, more efficiently.
• Airport hand driers that actually work.

Why were these products not developed sooner? Did no other company listen to generations of frustrated consumers? Or were the former market leaders simply too afraid to cannibalize existing products and markets by introducing something truly innovative?

Dyson’s success is a lesson to all business leaders: Don’t be afraid to make yourself obsolete, or someone else will do it for you.

For most companies that’s easier said than done. I used these words while co-chairing a recent innovation conference in New York City, and I heard the groans from the audience.

I have heard their thoughts out loud too often:

• “We are the market leaders. We are too big to fail.”
• “Our technology dominates the market, no need to worry,” said the buggy-whip maker to his horse.

Too many great companies have disappeared because they resisted change instead of embracing it. We may now be watching the demise of yet another giant, in photography company Eastman Kodak Co. The incredible thing is that Kodak actually saw and invented a future when digital photography would replace film. But somehow it managed to resist it. As analyst Chris Whitmore of Deutsche Bank told The New York Times: “The big story here is that their core business — the yellow box business — got cannibalized by the digital camera, which ironically they invented.”

The “good news” for investors is that Kodak is now soundly and strategically focused on digital-printing technology (in an increasingly paperless world?). I don’t mean to pick on Kodak, as it is not the first company to resist change, and it won’t be the last.

So where do we turn to find an example of an industry successfully making itself obsolete? Look at autos. Car makers recognized it was only a matter of time before the traditional combustion engine model gave way to newer, cleaner technology. So over the past decade they have gradually introduced us to the future, in the form of clean diesel, hybrid and now fully electric engines.

Each of these introductions started small, with expensive pioneering products sold to early adopters. This is how the industry developed its ability to introduce alternative technology, test demand, optimize production, and manage the transition. Today auto makers have a clear understanding of their market and possess the production capacity to ramp up a full-scale transition – fully cannibalizing the old combustion technology – without endangering their revenues.

The car industry didn’t just stay ahead of the curve – it created and managed the curve. If more of Dyson’s vacuum-cleaner competitors had shared that kind of vision, they wouldn’t be sucking air.

Many people confuse the words innovator and inventor; they can be synonymous, but they don’t have to be. Some of the world’s most successful and well known innovators aren’t inventors at all; they are masters of the art of taking an idea or concept and making it better. Often, they are able to make good ideas into the best ideas of all time.

Take Steve Jobs, for example. Famous author, Malcom Gladwell, has dubbed him, “The Tweaker” in a recent article he wrote for The New Yorker. Jobs was a masterful innovator because he was able to take the ideas of others and turn them into winning products and concepts. For example, Jobs got the ideas for the main characteristics of the MacIntosh operating system from Xerox PARC, stemming from a famous visit there in 1979. The revolutionary iPad evolved from an engineer at Microsoft’s idea for a tablet computer. His idea made use of a stylus – an old idea that wasn’t revolutionary enough for Jobs. He did away with the stylus and the iPad made history as one of the most coveted devices of its era.

The moral to this innovation story? You don’t have to reinvent the wheel to become an epic success.

Once every quarter, I receive a beautiful invitation from my company’s law firm to attend a seminar to learn some important new fact about changes in the law. I never go.

Once every quarter, I receive a beautiful invitation from my accounting firm to learn something new about sales, marketing or motivation. I almost never miss it.

I applaud both firms’ efforts to engage their clients, but in this world of information overload, it’s more important than ever to engage in meaningful conversation with your customers. Service providers add value by enhancing the customer’s skill-set, not by telling them how they’ve improved their own.

Innovation isn’t about what interests you; it’s about what fascinates your customers.

With Dyson’s new bladeless fans, generation of kids will be denied the chance to stick pencils through the screen of the household fan to see what happens when they touch the spinning blades. Otherwise, you have to love U.K.-based Dyson, because its innovations are so obvious, yet so breakthrough: safe, bladeless fans that move air without the rumbling and rattling, using technology patterned after jet engines; dual-cyclonic vacuums that suck up more dirt, more efficiently; and airport hand driers that really work.

Why were these products not developed sooner? Did no other company listen to generations of frustrated consumers? Or were the former market leaders simply too afraid to cannibalize existing products and markets by introducing something truly innovative?

Dyson’s success is a lesson. Don’t be afraid to make yourself obsolete, or someone else will do it for you.