Get your resume polished up if your company is not highly innovative; soon, you will be needing a new job. Companies that are not innovative cannot survive in the long run. They will be going out of business.
Despite its importance, innovation is a mystery to many leaders. To some, it is all about technology. Others wonder how to innovate without disrupting their current business model, and perhaps even more want to innovate, but are not sure how to get started.
Innovation is critical to your organization, and these hurdles are easily overcome.
More Than Just Technology
The first step to being innovative is creating the right mind-set. Innovation is much more than just technology; it is an outlook that should affect every part of an organization. As leaders, we need to encourage our teams continually to look for new and creative ways of doing things. Sometimes, those new ways will include technology, but not always.
It seems simple, and obvious, to say we should encourage our teams to be innovative, but most leaders don’t truly embrace that thinking. Most are fixed in the way they do things. Though it’s cliché, so they would never say it, their thinking is “if it’s not broken, don’t fix it.” The problem is that these leaders often fail to realize that it’s broken until it’s too late to fix.
The risk of unforeseen change is a big problem today. While innovation should be viewed as more than just technology, new tech does often play a part. Increasing computational power is driving change so fast that we will experience more transformation in the next 10 years than most industries have ever seen. Leaders no longer have time to recognize change on the way and adjust; change today is coming so fast that we need to expect it, and always be innovating.
Our team demonstrated its innovative mind-set earlier this year, when we were closed as a result of the uncertainty around Covid-19. Our leaders embraced a “don’t reopen, instead reset” mentality that challenged them to reset everything we do and position us for success after Covid-19. Our team is already seeing positive results from this innovative mind-set, and we will benefit from it for years to come.
However, if we had not had an innovation mind-set, it would have been impossible to reset that quickly. When organizations need an innovation culture, it is often too late to develop one.
Fear of Self-Disruption
The business landscape is littered with examples of leaders who let concerns about disrupting their own organizations keep them from taking the steps needed to innovate and survive. Kodak, Blockbuster, Blackberry, Nokia, Borders and just about every retailer falls into a group of businesses that failed to act even when they knew it was necessary; they did not want to disrupt their own business model. Sadly, they all ended up as victims of disruption.
The interesting part is that almost every company that has been disrupted out of business considered itself to be innovative. Unfortunately for them, they focused on the wrong type of innovation.
Innovation falls into two broad categories: sustaining and disruptive. Many companies are good at sustaining innovation, which, in short, is innovation that makes current products better. Because those companies are good at sustaining innovation, they often consider themselves to be innovators, and that is a big, dangerous trap that sets them on a path to going out of business.
The second type of innovation, disruptive, is named appropriately. Disruptive innovation transforms markets and how customers have their needs met. Companies that practice sustaining innovation make it tougher on their competitors, but disruptive innovators put their competitors out of business. That is a big difference.
Even leaders who understand the different types of innovation often fail to realize that it is almost impossible for organizations to be both sustaining innovators and disruptive innovators. Disruptive innovation often requires organizations to put their entire business model at risk; it becomes an existential problem, literally. Sustaining innovators are rarely willing to take the risk of disrupting their entire business. That is why disruptive innovation almost always comes from the outside, even though sustaining innovators may have the same ideas and better resources.
A great example of this is Kodak, a company that invented the same digital technology that put it out of business. Kodak’s team was so consumed with its industry-leading technology and sustaining innovation that even when it considered marketing digital technology, it was through the paradigm of its print business. Kodak invented a transformative innovation but could not see it because the company was instead stuck focusing on sustaining innovation. This mistake cost many Kodak employees jobs, and Kodak investors billions of dollars.
In order to mitigate this problem, companies need to set up an entirely separate organization fully devoted to disruptive innovation. Our company, Correct Craft, did that, creating Watershed Innovation with the entire purpose of identifying, researching and developing plans to implement disruptive innovation throughout our organization. Our Watershed Innovation team works on research involving electrification, the Internet of Things, robotics, additive manufacturing, virtual and augmented reality, and other opportunities in a way that is not threatening to the existence of all or any part of our other companies.
So far, the results have been phenomenal.
How To Get Started
So, how does a leader who wants his organization to be innovative get started?
Read the book Mindset, written by Carol Dweck, with your team. Dweck explains not only how people get stuck in their thinking, but also the ways that being stuck limit a person’s potential.
Next, read The Innovator’s Dilemma by Clayton Christensen. This book is the bible of innovation and clearly explains the key issues related to being innovative.
Then, create tremendous clarity around the importance of innovation to your organization. Make sure everyone knows that transforming products and processes is important to you and the organization’s future success.
Consider how to separate sustaining and disruptive innovation within your organization. This is hard at small companies, so consider alternatives. At the very least, ensure that your team has a high awareness of the innovator’s dilemma so they can be on the lookout for it.
And last, be willing to fail. No one wants to do foolish things, but having a high risk aversion makes it almost impossible to be disruptively innovative.
Innovation is not mysterious; there are proven ways to help your company become an innovator. By implementing the above steps, you and your company can go a long way toward being innovative. You may even ensure your organization’s survival.