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Why companies can’t innovate?

04/10/2012 Leave a comment

 

Image representing Salim Ismail as depicted in...

Image via CrunchBase

 

A few weeks ago I heard Salim Ismail speak on innovation. For the most part those who attended the talks were amazed – and fair enough if you are hearing about nano technology and 3D printing for the first time it would be amazing. By no means am I saying that I am a know-it-all, actually the opposite, I love learning about new technology and seeing how humanity can improve.

 

The talks did highlight something very profound for me. It is very difficult for large corporates to innovate. These big companies are just plain stupid at being innovators. In every area of business within a large company the driving force is to be operationally efficient, this is sometimes confused with innovation.

 

The thing you learn quickly in the digital / online space is success is based on clearly identifying the problem and then building a solution that matches. Success is not just measured by how much money the company has made, which is the typical way companies think.

 

It’s really simple to prove as well, think about how you and your team or business is driven by top management. Is the motivation to learn, discover and make mistakes or are you driven to “deliver”, it’s all about delivery! How can we deliver faster, more efficiently, use what we have better and please and maintain relationships.

 

Big companies also don’t lack vision, as we might think, instead they have the amazing idea, but the idea fails because the red tape forces it to fail. The top management are to slow to see the value of the vision, and only really get on board after the opportunity is gone.

 

A major point of Salim Ismail was that corporates need to embrace disruptive innovation and get their organisations to do some of that. It means allows the experts they have hired to do what they are good at. Just make sure that they are good at innovation. What I find is that teams that are bad at innovation are excellent at execution or delivery, but that is not what you need now.

 

So how do we do it?

 

As with anything, the first step is to identify the problem, in this case, for a company to have the honestly to realise that a barrier exist. The Church of Christ has the next thing you need – a solid understanding of being autonomous. Clayton Christensen puts it well by saying “… for disruptive innovations to be pursued effectively, they require autonomous business units”. Most business have those team or units which at the first sniff of innovation, will find it a remove it like a cancer. This is way to build that innovation, you need to have it protected from such, for the innovative team to be save from the crazy doctors who are blind in the business.

 

Next, incentivise the team man! How simply is this, motivated people are further driven to succeed when they are given more reasons to. It’s not always about money but the pride of recognition, and offering value for value works well.

 

I also have a buddy at the office who is like a Nazi about testing everything. he has a point, yes Goolam does. You have to test everything you are doing, including this entire idea, if you are too lazy to test or too busy to test then you are bound to fail. You also need to take the innovation and ensure that it still does mean the requirements for the shareholders, at this stage you don’t want to go into production and then run a loss just to show your innovation. VW’s Buggatti Veyron is an example of this, amazing production car, so much so that even Top Gear called it the best car that we would ever see in our lifetime, the only issue is that VW runs a loss when it sells it. It cost more to produce the car that VW sells it for. So make sure you are testing your innovation so that it works and it’s affordable.

 

Finally, just think – while sitting in for the talk, Salim asked groups of people to explain how the world is changing and how it would affect us. This question came a day after he showed proof of the changes in the form of amazing innovation from all over the world in nearly every field. Every group could see the changes, could explain the impact, except one. One guys stood up and said “nothing is going to change in our world!” I sat there shocked, where have you been for the last two days, have you even listened to one word spoken. The speak just said everything is going to change and here you stupid person can’t even answer the question you’ve been asked.

 

There are lots of stupid people in the world, so make sure, you don’t have stupid people leading your business. If you do, then this blog is a waste of your time.

 

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