With many people viewing enterprises as fixtures of the landscape, the turnover in the Fortune 500 List indicates otherwise:
- 52 % of Fortune 500 companies in 2000 are gone
- 88 % of Fortune 500 companies in 1970 are gone
- 40 % of current Fortune 500 companies are expected to be gone in 10 years
While there are many factors contributing to this turnover, a leading indicator of being future ready is how well the organization is “Innovating for Impact“ – on a sustainable basis.
To innovate for impact requires very talented, motivated and resourceful people, a highly entrepreneurial mindset, strong look ahead, new vision, long-term thinking, developing new competencies, resolve, learning fast, iterative execution, etc.
When this isn’t the case, Innovation Theater occurs because –
A. Leadership and culture is challenged to meaningfully increase enterprise relevance and revenue (ie: find the next $ 1 billion is revenue, successfully grow current markets or enter new markets, etc.)
B. A theoretical undertaking of Innovation exceeds the ability of the organization to meaningfully change / explore / create new opportunities
C. Lack of – vision, look-ahead, confidence, risk tolerance, etc.
D. Decision makers don’t see the changing nature of risk, or the rising risk of not meaningfully changing, or have blind spots
E. Familiarity and comfort with the status quo
F. Incompetence , NIA (Naivety , Ignorance, Arrogance) , FUD (Fear, Uncertainty, Doubt) , False Confidence
G. Inability to distinguish between – “Fact from Fiction” – or – “Substance from Show”
H. The demands of Wall Street drive companies to appear they are innovative
I. Politics, inter- company issues, personnel likeability (or lack of), etc.
Because every organization is challenged to overcome these challenges is why “Innovation Theater” exists. And when you factor in that only a few innovations become real winners, the low probability of success is another challenge!
While recognizing this is a conundrum, with the enterprise turnover evidence above, it’s clear a strategy of “Innovating for Impact” is essential for the organization to being part of the future.
For more insights on Innovation Theater and the signs of what to avoid, see –
- Kuznicki, Mark; 3 Signals of “Innovation Theatre” to Watch Out For; Medium
- Goh, Frances; 5 Types of Innovation Theatre Happening in your Oganisation Right Now; Collective Campus
- Griffith, Erin; Corporations Are Doing ‘Innovation Theater’ at the Worst Possible Time; Fortune; June 21, 2016
- Skillicorn, Nick; Is your company just performing “Innovation Theatre”?; Idea to Value
- Blank, Steve; Why Companies Do “Innovation Theater” Instead of Actual Innovation; Harvard Business Review, October 7, 2019
- Maurya, Ash; The Root Cause for Innovation Theater and How to Avoid It; Medium; Mar 19, 2019
- McKendrick, Joe; Three Steps To Getting Past ‘Innovation Theater’ With Data Analytics; Forbes; Jan 24, 2019
If interested in discussing how to increase the rewards from innovation (and avoid Innovation Theater) to better position your organization for success, see Innovation for Impact or contact CAIL.
January 12, 2021 CAIL Innovation commentary info@cail.com