Innovation: why it’s so damn hard and what to do about it.


What’s obvious is this: it’s a rapidly changing world and businesses have to change accordingly. And yet change does not come naturally to most businesses.

‘In many respects, innovation is seen as the opposite of efficiency, because it is not routine and has unpredictable outcomes,’ argues Ajaz Ahmed in “Velocity: The Seven New Laws for a World Gone Digital”. ‘This can create an environment in which there is no investment into future revenue streams because of the short-term impact on margins. As a result, the established business becomes resistant to innovation because it feels threatened by it, creating forces that actively discourage new thinking.’

I have seen this myself far too many times.

In his latest book, Clayton M Christensen, professor of business administration at Harvard Business School, says that every time an executive in an established company needs to make an investment decision, there are two choices on the menu. The first is to use whatever already exists – it’s cheap and, besides, the team already has its hands full doing its current job . The second is to bear the higher cost and effort of making something completely new.

It’s understandable that the low-cost, low-effort and apparently low-risk options almost always win, with innovation being suffocated as a result. However, as Christensen observes, in an environment of change and competition, companies taking the easy route often end up paying dearly for it – because they lose their competitiveness. Compare and contrast this approach with that of Google, where engineers are allowed to spend one-fifth of their time on their own projects. Perhaps the real risk is in not taking the risk that innovation entails.

Now the economic downturn has become the new reality, it’s time for corporations to stop using it as a catch-all excuse for lack of investment.  The recession isn’t going anywhere fast in 2013 and those brands that continue to hope that their business will ‘bounce back’ on the basis of an increasingly elusive economic recovery stand little chance of survival.

Innovation today may require a structural loosening-up. In “Adapt: Why Success Always Starts with Failure”, economist Tim Harford writes that many corporations persist with a level of centralisation created for an era dominated by logistics and scale, which becomes an anchor in an era dominated by innovation and creativity. This is particularly true in marketing, where global marketing arrangements deny local markets the ability to engage with local suppliers to drive fast and adaptive innovation.

Businesses must accept risk as a necessary part of success and cannot let a challenging business environment reduce their stomach for failure. To paraphrase Shakespeare, it is better to have tried to innovate and failed that not to have innovated at all.

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One Response to “Innovation: why it’s so damn hard and what to do about it.”

  1. Your argument is very well stated and I believe from experience on both sides of the Innovation fence in the retail market, to be very accurate.

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