In a recent article I wrote about the retail innovation coming out of China. In another one I wrote about the four strategy pillars that retailers need to implement in order to keep and win customers’ hearts and minds. This is not all breaking news for corporate leaders, still they resist taking risks and pivoting their business models. They not only risk being “Kodak’ed” at any given moment by the likes of an Amazon or other more innovative competitors – they also risk thousands of employees eventually losing their jobs because leaders have not responded to changing customer expectations fast enough.
However, many corporate leaders argue that corporate innovation is an oxymoron because corporations are built to execute a known business model at scale. This is what makes them so different from startups. Startups are searching for a business model they hope to scale in the future, if they survive. And this is why everyone knows why it is so difficult for corporations to innovate like startups. Difficult, but not impossible.
It takes work and determination and a titanic cultural shift, but you can create an innovation mindset within the most established corporations. So why don’t they? Fear is a huge blocker to innovation: fear of failure, fear of change, fear of the unknown. They should not allow fear to paralyze their organization in an era where no company is too big to fail.
Companies that only focus on executing profitable business models will never be innovative. Instead, they can follow a parallel path, making space for innovation and restructuring their organizations to allow for innovation while still keeping the lights on.
Most companies set their goals at the start of the fiscal year and everyone works towards achieving those goals.
This is a tried-and-true method for providing shareholder value. It is also an established system of fear and pressure. Whether your company stack ranks high and low achievers or simply adds a dollar value to individual goals, it creates an environment that stifles creativity and innovative thinking. It also doesn’t allow people to benefit from their real potential. Innovation requires a level of risk taking and it does not thrive in a fear-based environment.
Companies that rely on innovation coming in the form of new products or Research and Development (R&D) are selling their most valuable asset short. There is nothing that expensive idea management software and idea competitions can do that an engaged and thriving workforce can’t. Even companies who invested in innovation labs, incubators or accelerators have learned that these exercises amount to little more than “innovation theater”.
Startup founders have been saying this for years. One of the main reasons these innovation labs are failing is that not only their work is invisible to the larger business, but the results may not even solve the problem. You may be tempted to solve the problem from the outside in, but if you don’t bring along your teams to help solving the problem, not only will they not be invested in the solution, but you may be solving the wrong problem.
One of Amazon’s leadership principles is what helps keeping them from becoming a slow-moving oaf of a corporation: Fail Fast.
Ask anyone in the C-Suite today and they will nod their head at this concept. Failing fast is good, right? It means you can get to success quicker, right? This is where the concept of failing fast is misunderstood. As Jeff Bezos once said, “Failure comes part and parcel with invention. It’s not optional. We understand that and believe in failing early and iterating until we get it right.” You don’t fail once and then go on to success. You need to build failure into your operations and use data to gauge which programs should continue and which should be jettisoned.
You may have existing structures that are necessary for your teams to function in the day-to-day. Because Corporations really cannot perform like startups in this particular way, you can use these constraints as fuel for your innovation initiatives. In fact, your teams probably have ways to improve existing processes already. This is where if you are making room for innovation, these ideas can come out of the most surprising individuals.
Everyone in the organization needs to take responsibility for innovation, not just the leaders. The leaders can drive the discussion but it is truly the people closest to the products, systems and structures that should be empowered to make meaningful change. When you change from being a risk-averse company to an adaptable company able to pivot and stretch, your competitive advantage becomes self-awareness, creativity and resilience: the three most critical traits of Adaptive Teams.
Every company has already been in a pure innovative phase once. It was exactly when your company transformed from the network of the early days to the hierarchy of today. This is not to say that you should go backwards, but instead progress towards an innovative mindset that is pervasive throughout your organization that will help you thrive in the future and also reframe problems during times of adversity.