Winner of the CES Innovation Award at the 2024 CES Unveiled event held in Las Vegas, Nevada, USA on Sunday, January 1st. … [+]
In my experience working and consulting for mature companies, almost all of them talk a lot about the innovation efforts they are undertaking, have teams dedicated to those efforts, and that new ideas We constantly reassure boards and investors that it is unique to the organization. It turns out that often this is just a quarrel, with minimal results to show success.
My conclusion is that most companies are structured to maximize efficiency and minimize risk, resulting in an environment that discourages breakthrough innovation. I always struggled with how to turn this situation around. That’s why I was happy to find some great guidance in the new book “The Illusion Of Innovation” by Elliot Parker, founder and CEO of High Alpha Innovation.
He provides six tips for transforming any organization, large or small, into a resilient, long-term competitive venture that delivers radical innovation in today’s chaotic business world and markets. You have suggested a key and I agree with it.
1. Harness the power of small teams. Small teams tend to emulate startups that can learn, change, and grow quickly without the burden of having to spread what worked before. They can be motivated to rethink the existing world and pursue exponential gains rather than creating incremental improvements.
2. Don’t be tied down by your organization’s hierarchy. We must learn from nature, which hates hierarchical relationships. Evolution is not a planned, top-down, command-and-control effort. Resilient organizations encourage thinking and feedback from far down the organization and directly from customers, leading to innovative solutions.
3. Experiment beyond existing industry standards. Always align incentives with goals, but encourage purposeful experimentation outside of the industry’s traditional rules that constrain thought and action. You can push experimentation to every corner of your organization and even collaborate with external startups that aren’t afraid to play with fire.
Four. Seeks novelty to generate new strategic directions. The pursuit of abnormality and novelty must not become an aimless activity. Avoid moving away from where you have been and making decisions by committee about which experiments to run or what to do with the results. Select experiments based on their ability to produce real innovation results.
Five. Let each failed experiment become a springboard for new experiments. The best way to maximize profit and minimize risk is to use a structured learning strategy to run as many experiments as possible at the lowest cost per experiment. At some point, the answer may be a major acquisition, venture investment, or experimentation with external partnerships.
6. Gain a competitive edge with long-term thinking. Long-lived, healthy tissues produce more than they consume. They do not seek to maximize profitability in the short term and do not seek monopolistic positions. A long-term orientation stems from a deep concern for customers, a desire to improve human culture and make a positive impact on the world.
Making this kind of change is difficult in any business, but not changing can be even more disastrous. It’s difficult to take an organization that’s already scaled and set its course in a new direction. Entrenched incentives and metrics seem logical because they explain how the world worked best in the past. Abandoning them feels extremely dangerous and counterintuitive.
Organizations are also less able to adapt to changing times, as businesses are now better managed in terms of safety, regulatory requirements, and predictability. The solutions we currently develop to existing problems only create new challenges that are bigger and more complex.
Now, it’s up to you, as business leaders and professionals, to adapt and keep up with the same rapid changes happening in the marketplace and new customer demands. We need all businesses, large and small, to solve new and bigger challenges better. The future is not predetermined, but we all have a role to play in moving it forward.
