When in big companies I always wondered – Why do the real innovations seem to come from start-ups? While enterprises have more resources, brand recognition, domain knowledge, connections, etc. – there are major challenges with change, risk aversion, organization politics, etc. In contrast, my subsequent experiences as an entrepreneur showed how limited resources and fresh insights were hugely advantageous to identifying opportunity, developing the innovation mindset, etc. From this it’s easy to see the enterprise environment has huge obstacles to innovating for impact and being relevant in the future – while the entrepreneurial attributes are essential for a business to be successful going forward !
For example, from being with IBM as the industry leader in mainframe computers, we knew thousands of ways they could be linearly enhanced for business applications. Yet we never even dreamed of a new potential for Midrange systems until Digital Equipment, Data General, Wang, etc. built their companies in this space. This was followed by another missed opportunity in PCs when Digital Research, Radio Schack, Atari – then Apple and Microsoft were building their companies. And the third missed opportunity was the emergence of the Internet with Search, Social Media, etc. where Google, Yahoo, AOL, Facebook etc. built significant businesses. Unfortunately, IBM didn’t notice that new needs, opportunities and technology advances had opened significant new markets ! And the more the new markets were “ consumer centric “ (and not enterprise oriented), it became virtually impossible for IBM to participate in the growth of the information services industry ! Like Polaroid, Blockbuster, Xerox, etc. – IBM and many other enterprises are learning size, tradition, and history are good until they aren’t !
For those of us with a background in enterprises and start-ups, the following are suggestions to make innovation more rewarding –
- Invest in a new market, as well as new features – In general enterprises spend most of their resources linearly enhancing existing products, rather than monitoring change in the marketplace and being more opportunistic by catching the next wave. Employee and customer input are good for fixing bugs, but not good leading indicators. Look outside for future trends and potential.
- Use brainstorming for more creative solutions – Effective brainstorming is all about defining and executing a process for creative ideas to create a big impact. Most mature companies have unfortunately replaced it long ago with product management groups to fix problems. However, you can make brainstorming in enterprises effective with short, open-ended sessions, and a strong Innovation Leader.
- Don’t wait for innovation ideas from top management – Front-line people who deal directly with the market are much more likely to see needed changes, and they need to be rewarded for speaking up, rather than penalized for being the messenger. Of course, you have to propose solutions, request funding, and marshal peer support for credibility.
- Balance the focus on productivity versus creativity – Every business needs a focus on productivity as it scales, but an exclusive focus on faster and cheaper processes minimizes the search for really new opportunities, and long-term growth. In addition, team member engagement and loyalty depend largely on creativity and innovation to meaningfully improve outcomes.
- Foster a work culture of fun, openness, and new ideas – People see a work culture of solving problems and repeating fixed processes as just work and drudgery. You will actually get more productivity, as well as innovative new opportunities, from your team by making the work fun through rewarding creativity, and giving them time to think ahead.
- Don’t make innovation a function of the business plan – Business plans should be outlines of your strategy, milestones, and finances, but not the required source for change timelines and innovation steps. The need for market and technology changes is unpredictable in any timeframe. Make your innovations frequent and dynamic.
- Celebrate change failures as learning opportunities – If people fear that failed innovations will bring blame and retribution, they quickly learn to wait for edicts from above before getting creative. Promoting new changes as experiments reduces the stigma of failure, since everyone understands that experiments have a high failure rate.
- Create and nurture a team dedicated to change – Critical production organizations don’t have the time, mindset, or skills to focus on change, or look far ahead. Build a small dedicated team, sometimes called strategic planning, or change incubator / accelerator. Choose team members who have been there, or think like entrepreneurs, and reward them on results.
- Recognize the changing nature of risk – Whereby focusing on the short term means lower risk now with higher risk in the future – versus a strategic only or solely future centric approach means high risk now and hopefully low risk going forward (assuming new capabilities scale and new value is monetized successfully). Because of this, enterprises need is to balance near and long term requirements by being highly competent in doing H1, H2, H3 innovation to meaningfully improve outcomes – now and in the future.
To move your organization forward, be proactive in taking action to encourage innovation to satisfy expanding customers expectations and new opportunities – while improving efficiencies in daily operations. Your ability to thrive in the future depends on it.
If interesting in sharing insights on innovating for impact, please contact CAIL.
Oct 21, 2021 – by Marty Zwilling / CAIL CAIL Innovation commentary
905-940-9000 info@cail.com