For years, I used to open my CEO workshops with this question: “Are you an active promoter of innovation?” Every hand would go up. Then when I would ask for an "innovation" success story, all hands would go down.
Eventually I realized that these business executives were raising their hands because they wanted to be seen as innovators. The reality was that they were long on promise and short on performance, or as I like to say, all sizzle and no steak. Just like these business leaders, most of us want to be innovators, but when it comes to actually making it happen, we often come up short.
There are many examples out there today of extremely innovative corporations, like Apple and Google, but I would argue that they're notable because they're not the norm.
What typically happens in the business world is that corporations are good at a few core things but when the market changes, they are slow to respond, if they respond at all.
Why? Because change is hard. (Maxwell Wessel has written a very good blog for HBR along these lines, literally titled "Why Big Companies Can't Innovate.”)
As a corporate anthropologist, I am usually contacted by companies when they are going through a crisis. Shifts in the market have forced them to see that the things that have worked in the past suddenly aren’t working so well any more. So, we get to work at tackling ways to change.
Through years of doing this kind of work, I have seen firsthand the roadblocks that stand in the way of innovation and new ideas. Here are a few of the themes I've observed:
- Ingrained Corporate Culture: Companies inevitably develop an internal culture, and that culture supports the core of their business. It is part of what made the company strong in the first place. But when the company needs to react to an evolving market—i.e., it needs to change—the default position is to status quo, when what is needed is an "about-face" toward innovation. Therein is the problem with an ingrained culture—it doesn't encourage new ideas. There is no infrastructure for risk-taking “intrapreneurs” because what made a large organization stable in good times stubbornly inhibits it when a crisis hits.
- Human Resistance to Change: It is natural for humans to resist change, as much in corporations as in our personal lives. Change is literally pain. We have seen this a lot in family firms, where management teams are instinctively protective of the founding ideals and keen to protect their own role in the company. With 90% of U.S. firms operating as family firms but only 30% surviving to the second generation (and 12% to the third and 3% to the fourth), establishing a process for innovation is critical—not just for growth but for their very survival.
- Asking for Help is Hard: Leaders at the highest level have the same problems many of us have—asking for help. This is multiplied by the pressures (and ego) that comes with being a top decision-maker, coupled with the silo thinking that occurs when leaders get isolated. When problems arise, the temptation is to do more of what they're already doing when what is sorely needed is a fresh approach.
- Leadership Skill Sets: Executives know a lot about how to run a company but often not much about how to change it. And why should they? The skills needed to run a large company focus on keeping success going, not on trying new things. Entrepreneurs, on the other hand, are often fantastic innovators. They have to grapple with multiple obstacles every day and need to see and act on opportunities that others miss. All too often, this entrepreneurial spirit gets lost at exactly the time when innovation is needed.
How can business leaders overcome the natural aversion to innovation? By making change “something we do here,” not "something we avoid until there is a crisis."
I've written extensively about how companies can change in order to effectively:
- identify potential customers
- create new products that meet market needs
- come up with better ways to solve consumers' problems
- design innovative solutions
- open up new market space
To learn how you can innovatively bring about change in your company, I invite you to read my white paper: "Using Innovation Games® to Help Your Ideas Become Effective Innovations."
At Simon Associates Management Consultants, we're all about helping organizations adapt to changing times. If you'd like to discuss how we could help your business thrive in these rapidly changing times, please contact us. We love talking change!