Innovation is almost always the difference between success and failure.
That difference is between increasing share and margins on the one hand and producing at parity in an over-traded market for negligible profits on the other.
The ability of any company, big or small, to innovate is tied to three things.
The company Leadership
The company Culture
The focus of the Business
Leaders who are outward looking, who send clear signals that they expect and reward innovation, are usually rewarded themselves in two ways.
– They attract smarter, more talented creative people who are much better to work with and;
– Those people have better ideas that make the business more successful.
Company Culture which encourages exploration and differing views, which accepts the occasional mistakes and costs that go with those, is more likely to produce significant innovations and to keep doing so.
A Business Focus on looking for significant changes to alter the landscape of the industry and how it addresses the needs of its customers, instead of fine-tuning small changes over a long period, is more likely to pull the rug out from under its competitors.
None of this is a surprise. Nothing written here is new. So why aren’t more companies doing it, especially now?
One reason is a lack of leaders empowered to do their jobs this way. This is a shareholders and supervisory board problem. If your company is hogtied this way abandon hope; abandon ship.
However, the biggest innovation killer is often harder to fix, more sinister and rooted in the very success of a company.
As businesses grow, they start to believe their own bullshit about why they are doing so well. That in turn starts to form an ideological immune system which reacts against anything unexpected from outside The Company Way. The watch-phrase in those organizations goes something like this:
“No, that’s not how we do things around here.”
Think about your company. Is an ideological immune system becoming part of your culture? If it is, fix it fast if empowered to, or abandon ship if you’re not.
The only time a company can ever condone that statement is when a type two hiring error proposes canceling innovation, abandoning reason and copying what the competition did last season.