“Innovate or die.” It’s one of management guru Peter Drucker’s most famous dictums, which summarizes a critical difference between companies that are willing to disrupt themselves to become (and stay) leaders, and those content to rest on their laurels until the marketplace has passed them by.
As urgent as that may seem, many organizations stagnate. Even in Silicon Valley, I meet industry leaders every day expressing their fear of failing. Sometimes, this fear is a byproduct of the industry they work in. A prime example is in the telecommunications industry, where the longstanding ideal of providing “five-nines” (99.999% reliability and availability to customers) conditions employees to be more risk-averse.
In telecom and other verticals, recognizing these cultural inhibitions is crucial to fostering innovation that differentiates between market winners and losers. Here are a few other cultural innovation killers to watch out for in your organization:
- Fear of failure. Does your organization celebrate learning, especially from mistakes? Are you willing to fund bold projects that might go nowhere—even though they might leapfrog you ahead of the competition?
- Preoccupation with metrics. Does your organization or industry let KPIs become roadblocks to change? In telecom, for example, the fear of uptime that’s “only” 99.998% of 99.99% is enough to scare people out of taking risks.
- Rigidity amid adversity. The pandemic was a gut check for pivoting quickly and innovating on the fly. Soldiering on with the same pre-COVID strategy often led to bankruptcy. Organizations needed to make quick, bold decisions to survive and position themselves for post-pandemic success.
Although all organizations and industries have unique aspects that affect their ability to innovate, several tips and best practices apply across the board.
Change doesn’t only start at the top. C-level leadership must foster an environment where employees are encouraged to take risks. One way to achieve this is by minimizing the amount of top-down management and maximizing autonomy within a framework that ensures operational alignment. Real change also requires relentless passion and boldness from grassroots and up. Hire the new generation based not only on academic achievements but also on personality and curiosity.
The new culture also needs to encourage tenured employees to help junior colleagues who have innovative ideas but lack the network and organizational knowledge to get them off the ground. For example, experienced employees can help them refine use cases and make introductions to the right people, both inside the organization and with business partners.
Silos impede innovation. In the Industry 4.0 era, a manufacturer’s IT and OT teams must work together instead of staying in their traditional silos. The OT team can describe their use cases and business requirements—such as implementing autonomous robots—so their IT colleagues can recommend the right technology enablers, such as a private 5G network.
Besides laying the foundation for successful innovation, this close collaboration avoids common communication-related problems such as security vulnerabilities and surprise costs.
Journey maps provide a powerful tool for future innovation. Take household appliances. Catching and fixing a problem before it gets extensive also eliminates the risk that the owner will replace it with a competitor’s product. A future-state journey map identifies those goals so the organization can begin working toward them.
For example, instead of relying on customers to call when they’re having problems, a manufacturer can embed its appliances with a Wi-Fi or cellular modem that automatically reports emerging issues. Now that company can provide a superior, market-differentiating customer experience where owners are automatically alerted and then put in touch with a local service partner.
Innovation is a marathon
Businesses must take the necessary steps to remove the impediments to innovation and create a collaborative environment. Double down on innovation through digital ecosystems and build “back2code” initiatives to internalize external software knowledge in core technology areas. By doing so, organizations can become reliable and effective co-innovation partners.
Road maps highlight the importance of taking the long-term perspective—and having the culture, resources, and stamina necessary to transform it into reality. Despite aphorisms such as “fail fast,” innovation often is a marathon rather than a sprint. It’s a fast marathon, however. If you’ve seen Olympic marathons, you know that very few would last even a short distance at the pace of the winner.
By taking a long-term view of innovation, companies can avoid being discouraged by the risks and uncertainties of a long runway ahead–and instead envision the benefits of staying the course. Impactful innovation is a crucial characteristic of market leaders across all industries, and it requires thoughtful fostering, continuous exercise, and bold decisions.