The market conditions are tough with rapidly changing needs, competition is rife so customers have greater choice and are willing to take it, who the customer is and where they are doing business changes all the time and the government introduces new policies and regulations all the time.
You know that your company needs to be more creative, innovative and agile to deal with these issues or it could go under, so you brief the senior staff on the needs and demand more ideas, innovative value propositions, improved supply chains, better marketing and higher sales – then sit back to watch it happen.
After a period of nail biting you realize it’s not happening, so what do you do now? Reiterate the problem and need for change and hope that the message gets through? Use the threat of the consequences of failure to act to drive everyone forward? Or do you take an honest look at how your business operates, understand why it’s not able to deliver and be prepared to make the fundamental changes necessary to create the organization that can deliver under these conditions that are likely to persist for the foreseeable future?
Top business leaders now see the last option as the right way, so what are some of the key barriers in your organization that get in the way of better creativity and keep your business mired in outdated business models and processes? Broadly speaking we can categories these into 4 domains:
Culture (how do we behave?)
- Protection of knowledge and information where “what I/we know” is perceived as giving power and protection to individuals and teams.
- Reward systems that reinforce these protectionist attitudes by rewarding only direct contributions and not those that create an open, supportive and dynamic culture.
- Issues of personal risk; do I propose something that will bring me unwanted attention from more senior staff who may resent me being presumptuous, will it attract ridicule from my peers who may also resent me for trying to be better than them.
- Corporate attitudes to risk taking and the fear of the unproven where mistakes result in blame and reduction in the perceived value of individuals and teams. This can result in excessive analysis of opportunities and failure to seize the initiative before someone else does.
- Lack of investment for the future with a focus on short term financial objectives.
Organizational (how we do things?)
- Resistance to changing established practices and procedures, “we’ve always done it this way before” and “it’s work this way before” attitudes,
- Expectation of ROI on recently introduced changes can result in resistance to further change, even if the recent changes are wrong!
- Over emphasis placed on cost control, efficiency and adherence to defined process and procedure. These are important issues, but they should not be so constraining as to stifle creativity.
- Complex and rigid internal structures which lead to poor communications and cooperation; capabilities are unclear, duplication leads to internal competition and communications are poor so knowledge and information are degraded.
Technical (what we use in our products and services or in the systems we use to deliver them?)
- A lack of knowledge and experience in the use of new technologies can lead to resistance to adoption, particularly where the management culture is risk averse, sometimes on the back of previous adoption of immature technologies resulting in embarrassing failures.
- Investment costs for adoption of cutting edge technologies can be high and gaining authorization for investments in organizations that favour policies that require rapid returns will be hard.
Human Resources (what kind of people do we have?)
- A lack of creativity skills and talent in the human resources available to an organization is one of the most significant barriers, while this can be an issue at all levels the most critical is a lack of creativity in the leadership cadre (see an earlier blog item for more details on this subject) that can be fundamental in creating many of the other barriers.
Removing these barriers is critical success factor for the modern business and needs clear vision, strategy and effective action by the executive leaders of an organization to drive the necessary changes.
Effective management of increasing complexity in the markets and business operations will require improved creative leadership capabilities at all levels to create effective and efficient organizations that are responsive to highly dynamic market conditions.
Creating an approach that balances Blue Ocean market innovation with competitive domination in existing Red Ocean markets represents an effective strategy for achieving successful profitability and growth.
Innovation remains the key to strong economic growth for corporations of any size and so needs to be a integral part of any future looking strategy. However, simply having a ‘gut’ feeling about the need and expressing a desire from the top for more innovation is not enough. It needs strong leadership and real commitment from the CEO down to the business unit managers and that commitment needs to be tangible and regularly refreshed. At the top of the organization, the leadership team needs to fully understand what innovation means within the context of their organization and markets; both in terms of what the innovation needs to produce and how the organization needs to achieve it. Only by building this level of understanding will they be able to articulate the vision, formulate and implement the correct strategy and create the inspiration that will lead to success.
Innovation at the edge of an organization can be an exciting place for those who like to challenge the norm to be; there can be opportunities to explore new technologies, develop radical concepts and potentially shape new markets. It can also be a risky place, often having only tacit support from the corporate hierarchy who will be quick to seize upon any success and bring it into the mainstream fold, or to hold accountable those who have dared to stretch accountability and budgets as optimism turns to finger pointing when a concept fails or a market opportunity evaporates.