Dana A. Oliver is the Senior Director of Research & Development at Medtronic. He has helped grow Medtronic’s Surgical Technologies ENT / NT division from $100 million to approximately $2 billion in annual revenues over fourteen years. With 30 years of experience and an impressive track record of revenue generation, Dana’s latest book Mantra Design is a must-read for every new product development professional aspiring to introduce premium priced, patent protected, market share leading products.
In Mantra Design, Dana reveals the secrets for profitable and lasting innovation, including how to identify your customer’s unmet needs and how to expedite new product development. He provides an easy to understand methodology in the form of 14 quick, digestible mantras that highlight the power of true innovation.
“Innovation is the lifeblood of any company’s continued growth and future survival,” says Dana A. Oliver. “To this day, I continue to read, learn, and evolve my leadership and innovation philosophies; and I hope that this book is beneficial to the next generation of innovation professionals.”
Mantra Design emphasizes the importance of continued innovation to keep sales teams and customers excited about the products and loyal to the business where they invest their time and money, creating the cash flow vital to a company’s success.
Mantra Design was published in October 2015 and is available for sale on Amazon.
To learn more, please visit MantraLeadership.com
Excerpt from Mantra Design:
INNOVATION IS LITERALLY the lifeblood of any company’s continued growth and future survival. Innovation is the purposeful and continual reinvention of the company’s product portfolio by investing into one or all three strategic segments known as expansion, core, and adjacency. Expansion can be thought of as simply expanding your market share. Market share expansion can be accomplished through a variety of strategies including taking a share from your competitors by improved customer account penetration achieved by the offering of a more exhaustive portfolio of products or by offering your customers improved efficiencies through synergistic solutions such as lessening the number of steps or time to perform their job. Core is the deliberate focus and continual improvement of your primary products through the incremental betterment of your company’s platform features to their planned obsolescence and replacement by a new and next generation of the company’s essential platforms. Adjacency is the acquisition into or the modification of your primary products to be redesigned to be useful in similar marketplaces such as initially offering artificial knees and then expanding into the hip replacement market.
Innovation provides the sales team with new and differentiated products, which, of course, drive revenue growth by keeping the portfolio fresh. It keeps customers excited about your products and maintains their loyalty, it keeps employees engaged, and most importantly it provides the essential ingredient to maintain the company’s life force that is also known as cash flow. Pro table innovation fuels cash flow, which in turn can be used for reinvestment back into the research and development pipeline. It provides for infrastructure improvements, business expanding acquisitions, strategic minority investments, and shareholder returns in the form of stock buybacks and cash dividends. Moreover, cash flow is needed to provide company employees with bonuses, merit raises, promotions, training, and overarching business expansion. A lack of innovation, on the other hand, slowly starves the business of the oxygen-rich green dollars necessary to ensure growth. If your products and services are not regularly refreshed, it will be difficult to keep your customer’s loyalty because your competitors will convert your accounts by offering them improved products, services, and efficiencies. If innovation is missing from any company, then the result is that the business is being milked; and over time, the products will become old and antiquated, which in return results in declining revenues, which more often than not transforms the once-pro table company into a mere product line for another business.
So the question arises: why would any business stop investing into its future pipeline? The answer can be found by the intentions of the individuals running the business. For instance, it’s not uncommon for some large institutions to buy pro table and successful companies and thereafter begin to minimize or even stop all new product development and only make modest investments into sustaining engineering in attempts to maintain the existing portfolio. This strategy immediately drives down fixed and discretionary spending by lowering the research and development headcount and its associated project expenses, including future infrastructure investments, in return for higher operating margins and increased cash flows. This new net windfall in cash is purposely bankrolled with the intention of buying yet another pro table business. Simply put, you can invest in the existing business, or you can suck every possible dollar out of the business and use those monies for future acquisitions. One approach offers continued sustainability for the company being acquired while the other offers continued sustainability for the parent company. Regardless of the business philosophy, the result is the same for the company entity that is not reinvesting in innovation, and that is certain death in due time.
At the end of the day, working for any given business, you are likely to find yourself in one of three places. Part of a company strategy with heavy investments into organic development in attempts to grow and establish the company’s brands and name recognition. Second and more commonly are the large institutions who are making modest investments into research and development but are more committed to ensuring the company’s stock price continues to grow and regular dividends are paid out. These typical publicly traded companies are taking a percentage of their revenues and making prudent investments back into their organic pipelines with a more applied-research focus or what can be otherwise thought of as safe product development efforts that offer lessened risk and budget consumption in return for more predictable revenue generation while ensuring earnings are being returned in one of three of ways—stock buybacks, dividend payouts and cash reserves—for future company investments such as acquisitions. The last strategy was mentioned previously, and that is to only maintain your existing portfolio of products without any significant innovation efforts for the goal to maximize leverage, which is a nice word to secure as many profits as possible to build cash reserves for future acquisition targets.
A sad and more troubling variation of leverage is the cost containment CEO who is trying to bolster their résumé by showing improved business results at the sacrifice of pipeline investments. The decision is made to either stop or minimize innovation for immediate short-term higher profits and earnings that are portrayed by executive leadership as cost control measures, leading to an improved balance sheet in return for favorable investor community reviews. These dubious CEOs in two or three years’ time are off to another opportunity touting their leadership abilities by showing increased shareholder earnings while leaving their predecessor a lackluster and aging portfolio requiring massive investments for its correction. This latter scenario is frankly grotesque and shows a true lack of integrity and character, yet it’s alive and well today, and it’s found when companies pander to short-term earnings reports. This is the very reason why it’s so important to not reward executives on short-term results but on sustained long-term growth, profitability, and overall company health. This is also why I prescribe to the mantra “Market Share Is Your Company’s GPS!” In short, this means that all business decisions should be thoroughly vetted to ensure that long-term customer focus is maintained by the measure of sustained or growing market share.