In this article in Canvas, Tim argues that in order to innovate, you must "build a culture that can afford to say no to the pressures of efficiency."
It is the resounding cry of businesses today. Despite prevailing imperatives, the list of companies that fail to innovate and subsequently perish continues to grow. Add Radio Shack and Sears to the doomed trilogy that includes Borders, Blackberry and Blockbuster. These companies perhaps talked about innovating, they planned to innovate, even invested time and money. But at the end of the day, they failed to innovate and, subsequently, to thrive.
Businesses must have a strategy that methodically aligns their innovation efforts with their goals.
Why is it so difficult for businesses to build and maintain the capacity to innovate?
The problem likely is caused by a lack of strategic innovation – a commitment to a set of coherent, mutually reinforcing policies or behaviors aimed at achieving a specific competitive goal. Businesses must have a strategy that methodically aligns their innovation efforts with their goals. If your mission is to disrupt your industry, here are some steps you can take to facilitate strategic innovation:
Identify your best strategy according to your mission
Michael Porter, professor at The Institute for Strategy and Competitiveness, based at the Harvard Business School, identified three different strategies that companies can pursue for growth; cost leadership, differentiation and customer focus. Your strategic innovation should support your company’s selected corporate strategy.
“Brands need strategic innovation to achieve their mission,” Porter says.
Terry Mitchell says constant innovation really is a requirement to stay ahead of the competition, regardless of which strategy is being pursued. “If the mission and vision of the company is to create cost leadership, then strategic innovation should align with finding ways to reduce cost without sacrificing customer value (think Southwest or Costco),” says Mitchell, VP of marketing, FUJIFILM Graphic Systems Division, FUJIFILM North America Corp.
Alternatively, if the corporate strategy was to pursue differentiation, then strategic innovation would be focused on finding ways to optimize differentiators most relevant to the customer served or a specific set of needs of a target group of customers (think Apple or Nike). “If serving customers better is the overall mission, then strategic innovation should focus on finding ways to really wow customers with legendary service (think Zappos or Nordstroms),” Mitchell says.
Mitchell says Fujifilm’s strategy is to create differentiation. “We strive to bring new value to customers by bringing new products and new technologies to market. Today, a good percentage of Fujifilm sales are from products that were not in our portfolio five years ago. The brand values must continually reinforce the strategy to ‘hold its place’ in the minds of the customer. Fujifilm needs to continually stay ahead with new technologies and incorporate these new technologies into products to benefit customers.”
“If you are pursuing differentiation as a core strategy, then you need every employee thinking about what they could do to help achieve this goal.” – Terry Mitchell, VP of Marketing, FUJIFILM Graphic Systems Division
Reinforce and share your vision
It’s all about sharing your vision. Communicating your company’s vision and making sure everyone is on board is paramount. “I believe you need to create a shared vision of the future with every employee,” Mitchell says. “If you are pursuing differentiation as a core strategy, then you need every employee thinking about what they could do to help achieve this goal. When everyone understands the vision and how they contribute to achieving the vision, great things happen.”
Leadership at Fujifilm helps build and foster a culture of innovation around two values and four process steps. “First, we challenge employees to imagine how changes to our products and services would benefit customers,” Mitchell says. “We call this creating ‘wow.’ We also empower employees to take ownership to find out more about what customers want, and take initiative to develop a product concept or change that would benefit customers. The process steps involve being close to customers to truly understand their needs, being open and collaborative to exchange expertise, acting swiftly to respond to customer needs, and adopting a flexible attitude toward new approaches to have ideas translate to reality.”
Think big, and don’t be risk-averse
Tim Leberecht, author of “The Business Romantic,” says the ability to think different and big is the most important element in your company’s strategic innovation.
“To encourage innovation you must build a culture that can afford to say no to the pressures of efficiency,” says Leberecht, who also serves as CMO at NBBJ. “True innovation always starts with waste, as harsh as that may sound. Leadership must create space for exploration and cultivate the fringes by cultivating the rebels and outliers. If you are a disruptive innovator like, say, Elon Musk (CEO and product architect of Tesla Motors), you must be an adventurer and a dreamer who risks being laughed at by others.”
Leberecht, the founder of The Business Romantic Society, a consulting network that helps organizations innovate, says that when he worked at the innovation consultancy Frog Design, a lot of Fortune 500 companies came to them wanting to know how they could “do what Apple did” or how to get better at innovation.
“They were eager to learn about innovation methodologies, ethnographic research, open innovation, innovation ecosystems, design thinking, and all the other buzz-worthy techniques and tools that seemed key to ‘solving innovation,’” Leberecht says. “But innovation can’t be solved. Like life, it is a mystery to be experienced, to use the philosopher Soren Kierkegaard’s words. There are some cues and best practices, but there are no formulas.”
Disruptive innovation is always a leap of faith, a big bet on something outlandish – an idea that often starts with a joke – like the crazy idea of Airbnb, where you rent your home out to strangers via the Internet.
“True innovation always starts with waste, as harsh as that may sound. Leadership must create space for exploration and cultivate the fringes by cultivating the rebels and outliers.” – Tim Leberecht, CMO, NBBJ
Today, Airbnb has more than 1.5 million listings in 34,000 cities and 190 countries, and NASA recently confirmed evidence that there’s water on Mars.
With strategic innovation, the sky is the limit.
This article first appeared in Canvas Magazine.