So what is the role of innovation today? How do we remain focused on innovation when times are tough? Should you even? To tackle these questions, the last one must be addressed first.
Should innovation even be a priority now?
It is incredibly hard to grow, even during good times. Companies struggle with new product success, illustrated by a 95% fail rate. Lack of growth is the No. 1 reason why CEOs are dismissed. Innovation is at the tip of the spear if we consider growth to be a serious and hopefully obvious goal of any company. Innovative employees are a corporation’s equivalent of Navy Seals: precision experts with a mission target and a clear plan for how to execute that mission. Tough times are the perfect catalyst for when innovation must be accelerated, given that competitors both known and unknown may be taking their proverbial foot off the gas pedal. During every major economic downturn, Nike doubled down on its R&D investment, with great success strengthening the business and shoring up core markets. The company recognized a growth opportunity and acted, using its innovation culture as the mechanism to move swiftly.
What is the role of innovation today?
I understand the concerns: “But Richard, we can’t do that when we are just trying to make ends meet, pay the bills, and protect jobs. How are we supposed to tell people to focus on innovation?” I have heard this for the last 25 years of my career working with hundreds of companies, and it is a real issue that I acknowledge. However, I ask you to consider a simple question: what is the alternative? Your company is in a constant battle, a fight for its life. Every day someone somewhere is looking to create an incredible way of making an impact. This coming decade’s Mega Trends have not fundamentally changed because of COVID-19 or political unrest. Massive compute increases remain top of mind. People will still live longer. Megacities will continue to expand. Mobility will continue to shift to automation. Electrification will forge ahead. How and at what pace are critical and complex considerations based on your vantage point, but these forces remain constant. It is not so much a “new normal” as it is an evolved reality. As such, your team also must evolve and become more focused and attuned to these true north forces that protect your organization’s future. This is even more important when companies look for ways to remain relevant, possibly embarking on a transformation journey during uncertain times. One important aspect has become more prominent: Teams must integrate a multi-pronged approach to survive and thrive. Social causes and political polarization have moved the cultural needle so much that diversity has become a strategic imperative in itself. Corporations are being compelled to seek a diverse set of opinions for optimized decision-making to ensure growth, with innovation diversity at the forefront.
How do we remain focused on innovation when times are tough?
Recently I ran our Growth Pipeline Diagnostic for the CEO of a large entertainment company, asking questions that helped him gauge his company’s ability to grow. Many of his answers pointed toward an all-too-frequent conclusion: growth is not a systemic and disciplined corporate practice. This seems like a rather odd thing to say, but I urge you to look within your company and ask whether you have a growth culture. This is not a “sales” culture; a growth culture, for example, is a culture of creativity, engagement, excellent product decisions, and disciplined innovation. In this CEO’s situation, that was most clearly diagnosed as the lack of a formal innovation process.
As a lifelong aspiring golfer, the analogy I often use is trying to hit a golf ball without placing your hands or feet correctly. Or maybe you take a running swing at the ball. Or worse still, you are using a celery stick for a club. Innovation at its fundamental best requires ingesting information that guides the future products and solutions that a company will offer. It is innovation’s mission to catalyze that information and create meaningful growth outcomes.
This leads me to a final point: focus. I would note that nowhere in this article have I suggested that innovation is a separate function or a separate team. Instead, I assert that during tough times all client-facing business teams must have enough dedicated time to focus on innovative concepts that will drive growth. It may be 20% of their day or 40% (the best I have seen). Yes, it will be a painful process and many initially will question why it is needed, but it will help organizations weather these tough times and emerge in a much stronger position for growth.