Just ask Correct Craft CEO Bill Yeargin about innovation, and you’ll actually get an intelligent discussion. When Yeargin took the helm at the company in 2006, it had one brand, Nautique. The company was falling apart. And then the recession hit. For the next six years, Yeargin traveled the world, visiting 42 countries as he attempted to beef up export sales in a flagging domestic market. Then he began a series of acquisitions that included six boat companies, two engine brands, an Austrian builder of electric marine engines, and two Aktion tow-parks. The business has gone from abysmal to about $500 million in annual sales.
Which brings us back to innovation. Yeargin is a student of Harvard’s Clayton Christensen, the guru who says there are two types of innovation: sustaining and disruptive. Sustaining innovation happens in established companies that tweak and modify their products. They are improved but cost more, effectively pricing many consumers out of the market.
Disruptive innovation takes place, by contrast, with companies that introduce a paradigm-shattering technology that is far cheaper than existing technologies. That not only attracts new consumers to the new brand, but leaves the leaders behind because they cannot compete on price. The big companies go from frontrunners to dinosaurs, while the smart, plucky startups set the pace of innovation.
Yeargin believes the same is happening in the boating industry. Correct Craft is investing heavily in new materials and design for its existing companies, but it has also established a disruptor to explore emerging technologies that could transform the industry. Its Watershed Innovations startup has tapped into the University of Central Florida’s honors engineering program to help uncover the best way forward for the industry. Watershed’s first project, an ultra-quiet-running aluminum boat, involves collaboration between its Sea-Ark Boats, Torqeedo electric engines, SeaDek flooring and the UCF students. This potentially revolutionary boat is expected out in six months and will most likely mark the beginning of many disruptive technologies from Watershed.
This article originally appeared in the November 2018 issue.