In many ways the world of organizational management is like the fashion industry. Both require a great deal of skill and can be cutthroat. But arguably the most similar characteristic between the two is their ability to routinely create a buzz around something different. In the fashion industry the buzz is around clothing enables, in the business world the buzz is around ideologies. Many times the buzz isn’t something original, such as bell-bottom pants making their way back to popularity, but something different for the current generation.
Today’s buzzword for organizational management is innovation. No, this isn’t an original idea however, it has once again become “fashionable” for corporate leaders talk about in board meetings, strategy sessions, and in mission statements. Innovation is powerful and can propel organizations to new heights such as it did with Disney, Apple, and Amazon. But what happens when the term innovation becomes just a label instead of a true vision? What happens when we make meaningless changes just to say we are innovative? Will abuse of this term destine it to become forgotten about for another 20-years like thigh-high boots and tie-die shirts?
True innovation is obtained by implementing a strategy that is original and goes against the mainstream. Innovation takes investment, both in time and money. It is easy to sit in a board meeting and talk about innovation, but it is something else entirely too actually act on it. Today it seems like every organization has the word innovation as part of their mission or vision statements but so few companies are actually doing anything that could be considered innovative! All companies SAY they want to be innovative but actually investing and taking the risks associated with implementing innovation is what separates successful companies from the rest of the pack. Steve Jobs and Jony Ive of Apple are prime examples of true innovators. The release of the iPod, iPhone, and iPad skyrocketed Apple past the competition and required considerable investment in capital and resources. While others talked, Apple acted.
Risk is the primary barrier to innovation. Most leaders back away from creative, against the grain approaches due to the risk of failure and loss of financial investment. New ideas that are untested are often squashed for fear of embarrassment to the company. However, truly innovative organizations embrace failure for the learning opportunity it provides. Innovators don’t look at it as a failure; they look at it as experimentation. A corporate culture that embraces innovation considers the time, money, and resources allocated to these pursuits as an investment, not an expense. Make no mistake about it; learning from our failures is the most effective learning tool out there and it is in these failures that true innovation is born. Tim Brown (CEO of IDEO) once said, “Fail early to succeed sooner”.
True innovation results in a benefit such as improved quality, customer retention, efficiency, or market share. Making changes just for the sake of change is not innovation! Take the below case study as an example:
A company spends $125,000 annually on the printing and binding of training manuals for the operation of network equipment. The company management announces an innovative idea to start utilizing tablets with an eBook version of the training manuals during training events instead of printing paper manuals for each class. It is determined that 370 tablets would need to be purchased due to the large quantity of training events and the various geographical locations of the events. Let’s say the average cost of a tablet is $400, thus requiring an investment of $148,000. Assuming that due to the high usage of the tablets (and probable abuse from the students) the tablets only have a life span of 1-year. Therefore, this innovative idea would actually result in a LOSS of $23,000!
Many business leaders confuse the use of modern technology with innovation. In the previous example, the business leaders had the misguided belief that by using the latest technology, tablets, to house the training documentation they would be innovative. In reality all they would be doing is wasting money on a method that neither improves quality or efficiency nor has any chance of creating new market share.
In today’s highly competitive marketplace, innovation is once again the talk of the town. However, true innovation requires investment that most organizations fear. To bypass this fear many make changes in the name of innovation even though there is no value added. Unless business leaders are ready to build a real innovative corporate culture by investing in sweat, money, and time they will continue to lag behind the true leaders of the industry. Dream big, step big, win big!