Innovation is at the Foundation of Business Success and Sustainability
Created on September 18, 2012
Why Innovate? How?
All companies, whether small or large, whether new or established, must innovate. In fact, all companies eventually reach a crisis where the options are stark and simple. You can innovate, or you can die.
Many companies, even the largest, stumble when they reach that crossroads. In fact, the average life expectancy of a Fortune 500 company is less than that of a human being. As Ray Stata, Chairman of semiconductor giant Analog Devices Incorporated (ADI) once said: “Every business has a life, and you always need to be looking beyond that life. The job of the CEO is to sense [the end of life] and respond, and to be an encouraging sponsor for those who see the future.” In other words, the only way to turn a thriving enterprise into an enduring institution is to strike a healthy balance between innovation and business-as-usual.
A high-stakes innovation challenge could arrive at any moment. Your own crossroads could be months away or it could be decades away. To wait for it to arrive is to wait too long. The day to start building your company’s innovation muscles is today.
There are rich rewards for starting now even if your life-and-death challenge is distant. Innovation sustains growth. No matter how successful at launch, growth rates for all new products and services eventually decline. Only repeated innovation sustains long-term growth. Furthermore, innovation sustains profitability. We all compete in a global economy that is more transparent than ever before. As a result, no cost advantage lasts for long. Companies sustain competitiveness only through routine innovations to improve efficiency.
The reasons to start innovating today go beyond direct financial rewards. Innovation satisfies employees. It gives them a reason to come to work each day. Though there is some comfort in routine, some comfort in equilibrium, it is inevitably a short-lived comfort. Enduring stability deadens spirits. People come to work wanting more, wanting to improve the world in front of them. Humans build. Humans innovate.
But how? Let’s start with the obvious. You need some innovative ideas.
In fact, when most people hear the word “innovation,” their immediate association is with the innovative idea itself — the romance of the “light-bulb moment.” When most business leaders think of steps they could take to make their companies more innovative, they think first about unleashing employee creativity to generate more ideas.
However, most companies, large and small, do not struggle from lack of ideas. Most have plenty of ideas. The struggle, instead, is to move more of the promising ideas forward.
Here is a fundamental innovation axiom: In any great innovation story, the idea is only Chapter 1. Ideas are crucial — but ideas are only beginnings. The journey from ideas to business results is difficult, because innovation is inevitably in conflict with business as usual. Tomorrow is inevitably in conflict with today. One of the central challenges of managing innovation, beyond ideas, is productively resolving that conflict.
What comes after the idea? Sadly, there is no science of innovation — no by-the-book discipline that will get you from idea to results. While many innovations are rooted in scientific discovery, managing innovation is far from scientific. The community of innovation researchers is only beginning to uncover with any clarity the best practices for making innovation happen. We do know that innovators are often inspired, determined, and committed. But we also know that inspiration and perspiration are not always enough.
Raising innovation capabilities to the next level starts with recognizing that innovation, at its very core, is about learning from experiments. Furthermore, some experiments are much more difficult than others. Experienced innovators, particularly those that participated in diving or gymnastics in their youth, recognize that some innovations are like a somersault, and some are like a triple-flip-with-a-quadruple-twist.
There are questions that establish an innovation’s degree-of-difficulty.
How long does the experiment take? Hours? Weeks? Months? Years?
Is there one experiment? Many simultaneous experiments? A sequence of similar experiments? A sequence of unique experiments?
How costly is the experiment relative to resources available?
To what extent does the experiment require building new organizational subunits? With new skill sets? New work processes? New reporting structures? New job descriptions?
To what extent will the “innovation group” need to interact with the business-as-usual group to implement the experiment?
There are other dimensions of the innovation challenge beyond the managerial — such as technical or engineering challenges. A staggering complex technical breakthrough can be relatively straightforward for managers to implement. And, a relatively unimaginative idea with no technical complexity whatsoever can be extraordinarily difficult for managers to implement.
Some innovations are more difficult to manage than others. The most prepared companies stand ready to tackle a wide range of innovation challenges.
Download The Sophisticated Innovator authored by Chris Trimble, Dartmouth College - Hanover, New Hampshire.