OEC Consultant's Corner
What Is
Innovation?
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By: Leland Barnecut
The Latin root of innovation is novus, meaning new. Innovation
means "bringing into effect new and more effective products,
services, or approaches." Continuous innovation allows
companies to adapt to constantly changing conditions—both
positive and negative. It makes companies more resilient and
cost effective. Breakthrough innovations make headlines, but
in fact successful organizations value incremental innovation
as well. In order to stay in synch with the times, they must
develop new markets, products, and services; find ancillary
uses for existing products; latch on to new economic trends;
and grow or streamline operations as needed.
That said, companies have to strike a balance between innovation
on one hand and order/organization on the other. Innovation
to a company is like cell renewal in the human body. Without
it there is stagnation and death, so it is absolutely vital.
On the other hand, no company can stand unrestrained innovation.
There has to be some degree of order, organization, and control
or costs will go wild and chaos will reign. Profitability
demands efficiency, and efficiency demands repetition, which
can put short-term profits at odds with the longer-term growth
provided by innovation.
Whether the natural tension between innovation and order turns
into paralyzing conflict or creative interplay really depends
on how the company is led. Each company needs to find its
own balance between life-giving innovation and life-sustaining
organization.
So all companies need to be innovative at some level?
Yes! I don’t want to torture the metaphor, but a company
really is like a living organism. It has to renew itself to
adapt to changing conditions. Most of the big companies that
we now see as pillars of stability were founded on innovative
ideas and have had innovative shifts of direction along the
way. A lot of other companies that were giants in their day
failed to adapt effectively and are history.
Why is innovative thinking important under current
conditions?
Innovation helps companies to:
- Find creative ways of keeping the
same level of service without using the same level of
resources.
- Retain top performers. People get a
sense of satisfaction from creating something new
(breakthrough) or making something better (incremental). I
personally stayed with a company six years longer than I had
planned because of the variety of projects I had there and
the level of creativity my management encouraged.
- Enhance teambuilding efforts. Teamwork and innovation
go hand-in-hand. Where you have innovation, you almost always
find cross-functional and specialist teams working to carry
it out. I would also support the notion that a truly team-based
organization is more likely to foster an innovative environment.
Today, are companies giving more weight to their stable
side in order to make stakeholders, employees, and customers
feel more secure?
These are obviously unusual times and leaders can’t
be faulted for feeling anxious. Companies will have reactions
to stress as varied as individuals have. Some are paralyzed
by the slightest threat; I have seen companies doing things
akin to applying the brakes to a car that is already stopped,
as if that will somehow help. Others are naturally agile or
are shaken out of their complacency, and they take advantage
of the turmoil to try something new. Overall, I sense a kind
of uneasy optimism right now, as if the nascent economic recovery
is like wet cement that we hope will dry soon before too much
graffiti gets scrawled into it.
What can a company do to foster innovation?
Some people are always innovative and some people never are.
Most people are somewhere in the middle. I firmly believe
that those in the middle take their cues from the overall
environment and their immediate leaders. Companies and their
leaders need to send a clear message that innovation is valued,
refrain from micromanaging employees (because nothing kills
the urge to innovate faster), and give employees recognition
for their ideas. Since innovation is never a sure-fire thing,
some level of failure must be tolerated.
That is the dilemma. Our business world is results oriented,
but much of the experimentation that eventually leads to successful
innovation is unsuccessful; there’s a lot of “failure”
involved in success. Companies that understand that are more
likely to give innovators the time, resources, and political
support they need to produce something new and better. Companies
that are impatient or superficial in their support of innovation
remind me of the Chinese proverb about the farmer who felt
that his crops were growing too slowly so he decided to help
them along by pulling on the roots.
What is the task of an innovative leader?
Independent of whether the leadership of a company openly
supports innovation or transmits signals against change, I
think that individual people experience the same ambivalence
toward innovation that organizations experience. People are
often skeptical of new things at the same time that they are
excited by them. The job of the innovator is to minimize the
perception of risk on the one hand and maximize the perception
of benefit on the other. Perception of risk is minimized by
helping others see that change is not necessarily loss. Risk
is also minimized by familiarizing people with the change
so that it is not seen as so strange after all. It takes a
lot of communicating, and successful innovators are usually
great lobbyists in their organizations.
Increasing perception of benefit involves helping the individual
constituencies affected by the innovation to see how their
goals will be met by its implementation. It is about answering
the question “what’s in it for me – or others?”
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For more information,
please contact Joan Caruso, Managing Director of Organizational
Effectiveness Consulting at The Ayers Group — (212)
889-7788.
Leland Barnecut is an Ayers Group consultant. He has consulted
in innovation since 1985 and has worked with clients in over
20 industries around the world. He is a former Senior Vice
President at D’Arcy Advertising (DMB&B), Managing
Director at PricewaterhouseCoopers LLP, and Partner of Harbridge
House, Inc.
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