Now look at averagely innovative companies, the ones that come up with new products that aim to compete with products developed by leading innovators. Most likely you will see the word “innovate” and its derivatives, such as “innovative” and “innovation” all over the place. That’s because these companies are striving to be innovative.
So, what’s going on here? The truth is, truly innovative companies, those the come up with breakthrough products and services, those that are game-changers in their sectors or that create new sectors, do not aim to be innovative. Rather they relentlessly strive to follow a unique strategy. Facebook originally aimed to create the ideal social network. Now they are trying to become an alternative to the world wide web itself. Apple has relentlessly focused on making beautifully engineered and designed gadgets such as mobile telephones, computers and pads.
Their leaders, such as the late Steve Jobs and Mark Zuckerberg, are not innovators. They are visionary leaders who so focused on their strategies that they are probably dreadfully boring at cocktail parties! But, by sharing their visions and their enthusiasm for their visions with their employees and business partners, they enable their companies to innovate. However, that innovation is focused on achieving unique strategic aims, rather than innovation for innovation’s sake.
In such environments, employees understand that top management is eager to implement ideas that help them in the pursuit of strategy. Indeed, the sole purpose of most teams is in one way or another to achieve strategic aims. Middle managers in visionary companies know that their jobs depend on working towards strategic goals. Innovation, on the other hand, is not important to them. That may seem ironic as they are following the best practices of innovation. But the key is that their aim is not to be innovative. It is to meet strategy based goals.
What do I mean by unique strategy? Many companies, especially large companies involved in varied business lines, tend to have bland strategies, such as to be the best in every sector in which they operate. Their strategic statements tend to be generic and could be used equally effectively by just about any company – even one in a completely different sector.
Visionary companies, on the other hand, tend to have much more specific strategic aims. For instance, Google’s original strategic aim was to produce the most relevant search results by using a special algorithm in their search engine. Gore aims to manufacture revolutionary products to solve specific industrial and medical problems.
Averagely Innovative Companies
Averagely innovative companies on the other hand tend to have blander strategic aims, such as to make high quality products. Their web sites are littered with the word “innovation”. Lenovo, for example, makes fine quality computers that can be found in households and businesses globally. It is an admirable, growing company. But it is not a particularly innovative company. As a result, the words “innovation” and “innovative” appears numerous times on their “About” page.
I have never worked with Lenovo, so I do not know what their situation is like internally. But I have worked with similar companies: quality, well run businesses that have recently decided to become more innovative. One of the first steps such companies take is to use the word “innovation” more frequently in corporate documentation. This is followed by hiring people to be innovation managers and to launch programmes to promote innovation.
Idea management software, or at least suggestion scheme software, is installed to capture ideas. Very possibly innovation consultants and trainers are hired to help guide the innovation initiative.
As a result of these activities, the company does indeed become more innovative. However, the innovation efforts tend to be unfocused. The result is usually incremental and medium level improvements on products, services and processes. It is extremely rare that these initiatives result in breakthrough innovation.
This is not a bad thing. Often, averagely innovative companies produce products that are better in many respects than the innovators. Apple may have led the pack with their innovative smart phone. But now many averagely innovative companies have produced smart phones that better Apple’s iPhone in various ways – and often for a lower price. Moreover, not everyone wants an iPhone. Many people want simpler, cheaper or less stylish telephones.
If your company is not an innovative leader, if it is not focused on relentlessly pursuing a unique strategy, you need to be realistic about where innovation can take you. In theory, you can transform your company into a visionary company that becomes a true innovator like those cited at the beginning of this article. This tranformation will probably mean replacing your CEO with a visionary leader who is willing to make drastic changes to every aspect of your company, starting with its strategy. She will probably need to sell off vast chunks of your business, transform the way you work and get rid of a lot of employees. Those who remain will need to learn to work in new ways. They will also need to legitimise their activities in line with strategy. Budgets, project management, approval methods and much more will need to be changed.
If you work in a medium to large company, you are probably smirking to yourself right now, thinking “Jeffrey is crazy. That’s never going to happen in my company!” And you are right. It is extremely rare that a company, except a very small one, will make such drastic changes. The board and shareholders are unlikely to authorise such actions. Even if an innovative leader is taken on as CEO, employees reluctant to change will do everything that they can to impede her changes and guarantee their jobs. After all, when things change in large companies, most people worry about their own stability and future rather than their employer’s innovation potential.
Not surprisingly, such change is extremely rare. The closest example that comes to my mind is Nokia, which started life as a rubber works and eventually became a Finnish industrial conglomerate involved in many industries. It was only in the 1990s that Nokia rid itself of many of its lines and focused on mobile telecommunications. And, during the 90s, Nokia was an innovative leader in GSM technology.
Most likely, you are not going to transform your company into an innovative leader. But, as I have said, there is nothing wrong with that. Most companies are not innovative leaders. But, by focusing on incremental and medium level improvements to products, services and processes, you can nevertheless have an extremely successful company. In fact, in many industries, such as fast food, soft drinks and construction, there has been little breakthrough innovation in recent years.
Moreover, you can learn from innovative leaders. Most importantly, review your strategy. Is it unique to your firm or is it the kind of strategy that just about any firm could claim. If so, make it better.
Once you have done this, do not launch an unfocused innovation initiative. Rather, ensure that your innovation initiative is aligned with strategy. This can be done through brainstorming, ideas campaigns and other activities that generate ideas to solve specific strategic problems. Do not simply focus on being innovative. That tends to result in a lot of small ideas that improve bits and pieces of your operations, but do not make a big difference to your company. Rather focus on your strategy and use innovation as a tool that enables you to do that.
This article first appeared in Report 103. image credit: forbes
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