The Fear of Innovation
It's always interesting to see how despite all the talk and bravado that so many CEOs are giving on how innovation is of "top importance" to their innovation (you only have to watch any CEO interview on CNBC, or read one of the by now hundreds of surveys written by every consulting company imaginable to see this in action) - very few CEOs are actually doing innovation.
The reason for this is several fold - but mainly various forms of Fear - especially the Fear of Change and the Fear of Risk.
For the longest time now, we , as business people, have known about the effect of change on an organization - we've even come up with entire books, divisions, and consulting practices designed to manage the effects of change. But innovation as a topic goes beyond that - for the real promise of what innovation is trying to achieve is to institutionalize regular and sustainable change.
Embracing Innovation means embracing and enforcing a commitment to be constantly changing and adapting to stay ahead of the game - and that can be a scary proposition for lesser CEOs. Not only that, but Innovation has the power to change not just what you sell and how you sell it, but also the power to change the very business itself. How hard must it be running a Forestry company that innovates itself into the cellphone business? Or how about the change from making typewriters to outsourced business services?
Not all companies are facing the same levels of change that Nokia and IBM (the two examples above) have gone through to be where they are now - but they will do. Almost every large company in existence that has been around for more than 100 years is no longer doing what they originally started off doing. Embracing innovation is more than a short term strategy for the wise CEO - it's a long term recipe to leaving a legacy.
Innovation can be a a risky exercise (especially if you don't choose your partners wisely!) that requires substantial investment and experimentation and that doesn't always guarantee the immediate payback that more risk adverse managers look for. However - as many CEOs are finding out - the risk of not innovating is far greater than any other alternative - the market needs change, the market demands change, the market rewards change.
You simply cannot deliver the ambitious growth targets that the markets demand by doing business as usual, by looking for incremental changes and mere line extensions, by hoping that innovations just rise to the top. Innovation by accident is not a strategy - it's a recipe for demise.
As the market gains speed and the pace of Innovation and change increases, the necessary complexity of change needed to gain traction in the market is also increasing (get the recent Innovation Dimensions Research Report from email@example.com for more). Lazy and inefficient innovators are punished by short innovation advantage times (ie the time for which any particular innovation provides a unique and substantial advantage in your competitive landscape) and the discipline and effort required by companies to enter the Innovation Arms Race gets higher.
So the question really is - can you afford to let these fears dominate your business? The longer you wait to take on the innovation challenge your company faces, the harder it will be for you to catch up to your competitors who move now.