Is The “Innovator’s Dilemma” Real In Direct Sales?


Have you ever thought about the “innovator’s dilemma” in your business?

What this basically means is that you are faced with the problem of choosing between “what has worked” and “what is next.” Since both these concepts can sometimes be at odds, it’s an interesting problem to deal with.

For example, in direct sales, home parties have worked and continue to work to sponsor new distributors. The “next thing” could be, sponsoring people using Facebook live.

In my view, there’s no question which to choose. I believe that businesses that are not forward-thinking will die. Our organizations must embrace a “what’s next” strategy while continuing to implement what has worked in the past. Otherwise, we will get trapped in old ideas that may soon be irrelevant.

The world is always changing, and the pace of change has now accelerated to the point where we no longer have the luxury of time. Sticking only to “what got us here” will ultimately destroy us if we grow too comfortable and are unwilling to adapt.

That’s the essence of
the innovator’s dilemma

Do we repeat the actions and strategies that led to our success? Do we continue to do what helped grow our business and increase our market prominence? Do we stay in our old patterns of doing business, even when the business is screaming to grow in a new direction?

On the other hand, do we develop disruptive innovations that might displace the very value propositions that our companies have been founded on?

Hopefully we can agree that the word “dilemma” captures the true essence of this challenge. It’s hard to let go of what once worked, even if you see that your company can’t grow without change.

As the CEO of a high-growth direct selling company, we faced this very challenge constantly: Will our new product innovations cannibalize the sales of our current lines? Will international expansion distract from our focus in our current markets?

Often, it felt like we had constructed an entire organization around impeding innovation and shelving ideas because of the risk to our current business. We found ourselves believing that we could make small adjustments, incremental changes, and turn some promotion “knobs” to improve when we stagnated.

Painfully, it didn’t work.

I think of the dilemma that Blockbuster Video faced when there was an internal struggle to create a Netflix-like offering. They feared cannibalizing their existing retail business and they allowed their fear to stop internal innovation. By the time they realized their mistake, it was too late and they had become obsolete.

How do we change and make the leap to innovation when it can involve so much risk?

The first thing we need to do is to put fear aside. Making decisions under the context of fear clouds our judgment and kills opportunity. It creates a culture where innovation is punished and ridiculed.

Second, we need to ask questions constantly: Why are our systems built this way? Where can we go next? How do we react when someone comes up with a “crazy” idea?

Your best bet is to challenge the very core of how you do business and where you see the market going. Encourage and reward your people for asking questions and challenging the status quo. Often, we recognize and reward our teams only for their answers or solutions. “Don’t bring me problems, bring me solutions,” is commonly said, yet fundamentally flawed. Instead, reward them for asking the right questions and highlighting the problems that still lack solutions.

The innovator’s dilemma is real in your business and mine. I would argue that to truly achieve the aspirational goals of our organizations, we must be willing to ask the tough questions, and challenge how we do things—even if those are the very things that helped us achieve success in the first place.

We must either make a dent in the world, or it will make a dent in us.

Brian Palmer
Krato CEO