Ironically, I sense that despite the year 2020 being welcomed as the year that we literally look forward to with clarity, the exact opposite is true.
The level of globally disruptive forces now in play, will make it ever more essential that established companies look to innovative thinking to settle their future prospects.
The problem established companies have — what Clay Christensen, called, 'the innovator’s dilemma' — is that they are forced to pursue high-margin business, as low-end underserved and unserved markets aren’t profitable enough to sustain their overheads structures and business models.
In the past ten years, many corporations have sought to innovate by rolling out a Digital Transformation project and/or by outsourcing their innovation to external startup accelerators. Boards of these companies have at least recognized that they can't just sit still and be the dinosaur in their market. What many companies have found is that these approaches often don't deliver anything like what was hoped for.
When I've spoken with C-level execs who have done this, the comments almost always indicate the results were well below expectation and the costs far higher than expected.
One large corporation told me they spent over $1m and thousands of hours of their employees time and they got a zero return. After investing so much they ended up with no change to their innovation capability.
The gap or reason for so much disappointment is that Transformation or Innovation is attempted without addressing the need to fundamentally change the culture and most likely the business model. Moving corporate culture from a business-as-usual mentality to an innovation-is-imperative mentality, is kind of obvious, but how do you make a start? In particular, how do you start and ensure you truly move-the-needle to position your company as an agile market-maker?
These realities are why I recommend that the C-suite makes a strategic call to imbed innovation in the culture of their company by focusing on up-skilling their staff and enabling all employees to have an opportunity to learn what it means to innovate.
When companies make a decision to embrace innovation by giving all their people an opportunity to participate and learn new skills, there's an enormous long-term payoff for all stakeholders, including shareholders.
The key issue remains; how can we make a start on this exciting new pathway of innovation as a core corporate competency?
I can offer hope and clarity as to how to get started with your corporate innovation system and your staff will love you for this approach.
When you think about engaging your people in this initiative, the guiding principle to convey is that no company will thrive or even survive in the 21st century by being comfortable with a Business-As-Usual mindset.
This might even scare some of your people and that could be a very positive emotion to be leveraged when innovating is embraced.
One thing for sure is that if you feel comfortable and sit still then almost certainly you'll be a target of the disruptors, who will be leveraging the full suite of digital technologies and who eagerly take risks. The internet, combined with near-ubiquitous mobile access, is continually creating very creative entry points for companies to target new markets with more affordable offerings that also provide at least a sustainable gross margin.
There are two fundamental approaches to embracing innovation inside your company, exclusive and inclusive. I argue for 'inclusive' because that approach has the biggest payoff over the long term.
'Exclusive' can be defined as an approach where specific staff are selected by management to participate in an innovation sprint based on their perceived readiness and potential to contribute.
'Inclusive' can be defined as an approach that involves as many of your staff who wish to participate, which could be because they are confident they can contribute, and/or they sense a learning opportunity whereby they will develop valuable new skills.
While the 'Inclusive' approach may not initially inspire all staff , it sends a signal that the company is open to discovering everyone's potential and does not exclude anyone based on their manager's perception of their ability to innovate.
The key elements of a successful 'Inclusive Innovation Model' include:
- the Board and C-level team share their vision for a corporation where all staff are involved (to a greater or lesser degree) in a continual process of agile innovation
- that all staff will have the opportunity to participate fully, if they choose to and, at a minimum, all staff will develop new and valuable skills for their future careers
- the Innovation efforts and investments are directed towards a more complete understanding of their customers problems and expectations
- that staff understand that established companies will slowly atrophy if they don't embrace innovation
- and, finally, staff understand that their employer intends to innovate to grow and prosper and that staff will also grow and prosper on their journey
The operational aspects of the 'Inclusive Innovation Model' will be the subject of the next Blog Post.