Leaders don’t need to innovate. Or do they?

“We’re the best at what we do. There is not an idea in the world which our experts didn’t think of, evaluated or implemented. Why do we need innovation management if we’re already doing great?”

I’m sure that every innovation management practitioner hears a statement like this one every once in a while. There are 3 problems with that statement.

 

1. The best are not the best forever

I often remember that 20+ years old (and yet so timeless) quote from Gary Hamel (https://hbr.org/1999/09/bringing-silicon-valley-inside): ” Out there in some garage, an entrepreneur is forging a bullet with your company’s name on it.”. It instantly reminds me why every slide deck in the world features a couple of slides about Nokia, Kodak, Uber and Airbnb. These stories are well known and illustrate the first problem so vividly.

It should not come as a surprise to anyone that “the best” today did not rise to leadership by headbutting with “the best” back in the day. They didn’t compete with the same business models, but found their opportunities in new ways of delivering value to their customers. Does it mean that the incumbent leaders are doomed to failure? Of course not! However, without committing to innovation, they might as well be running on optimism.

Properly managed innovation is what helps companies to stay relevant and to keep or capture that leadership position they are aiming for. Which brings me to the second problem.

 

2. Innovate where you’re not the best

An obvious example is Apple, of course. Apple was a computer manufacturer, but their most impactful innovations were non-core products (iTunes for example), marketing and branding. Apple’s phones are in some segments years behind the competition, but thanks to new and innovative approaches in other areas (other than their core business, that is), Apple today has an army of devout followers, charmed by the products designed with a customer in mind.

Using Apple as an example is so easy, even a bit lazy, so I frequently use another one from my personal experience. The company was an IT consultancy, a regional leader in implementing big vendor technology. One of the most impactful innovations was optimizing their sales process, by converting technical expertise and experience into algorithms that helped them automate calculating costs for complex projects, and making the experience fully transparent to their customers. This innovation helped them to drastically increase their sales and presales capacity, resulting in increased bookings. The best thing about it was that the idea didn’t come from the technical experts, but rather from exhausted sales guys, under pressure to deliver the quotas with limited resources. It came from people that experienced the problem.

Stimulating innovation in all aspects of business can make a huge difference. Which brings me to the third problem.

 

3. Ideas shouldn’t come from experts only

Innovation should be scaled across the whole company to benefit from all those years of accumulated experience. Breaking the innovation silos, where limited groups of people think of ideas, is one of the most important (if not “the” most important) objectives of innovation management.

The most valuable ideas can come from the least expected places, on all levels of the organization. I’m talking about those places where people are involved in everyday problems, and it’s exactly those people that know best how to articulate both their problems and solutions. Them! Not the management three levels up the organizational hierarchy.

I’ve been fortunate to observe remarkable examples that won’t show up on many slide decks and will remain hidden form wider audiences. Once could even call them examples of “invisible innovation”. A lathe machine operator figured out a way to manufacture product parts without relying on expensive licensed technology, and saved his company the costs of paying licenses for the technology. A dock worker came up with a solution that shortened the time to unload dry bulk cargo, enabling his company to reduce costs, thereby reducing prices, and becoming more competitive.

 

Applying innovation management principles and methods enables capturing ideas that solve problems from all aspects of business, and from all levels of the organization, consequentially helping the company on its way to becoming a leader. If you want to know more, you know how to reach me.

 

P.S. Do you have an example of #invisibleinnovation? I’d love to hear your experience!