Friday, June 04, 2010

Innovation is playing offense, not defense

Where would we be without a good sports analogy every so often?  I was thinking about the challenges of innovation recently and it occurred to me that corporate strategy and innovation is often about making a choice between defending turf and taking or creating turf.  Most firms prefer to try to thwart other attackers and defend their turf rather than create new turf or attack another firm in their markets.  The larger a firm becomes and the more comfortable it is on its own turf, the more defensive minded it becomes, because an offensive move detracts from playing defense and ensures a counter attack somewhere else.

The problem with playing defense - simply defending your existing product lines and market share - is that it is a "static" way of thinking.  If we think about traditional "defensive" strategies - in war or in sports - they are meant to prevent someone else from doing something or taking advantage of their strengths.  However, most defensive strategies are by their very nature tactical and static - think trench lines, castles in warfare or big defensive linemen in football.  These factors mean that the defense is in constant reactive mode, not proactively attacking but intent on defending and making an attack by the offense costly and difficult.  Which works as long as the offensive team or army works with the same mindsets as the defensive plan calls for.  If the thinking changes and doesn't align with the defensive capability or plan, the defense can be quickly rolled up.  I call to your attention the fact that in most wars in the 20th century, the army on the offensive usually won, and even in the cases where that wasn't true (Germany in World War II for instance) they were the aggressor and were winning, just made the mistake of fighting on too many fronts.

The point here is that playing defense becomes a game of what you are willing to concede.  It places the organization in a hunkered down, reactive mode where most of the energy is committed to quick reaction to thrusts and attacks.  It also assumes that the environmental conditions will remain relatively the same.  These concepts were probably reasonable for Fortune 500 companies in the 50s through the 90s.  A firm could scale up, put up reasonable defenses and operate in a profitable but defensive posture.  All of that changed with NAFTA, the consolidation of Europe and the emergence of China, India and Brazil.  Now, we have aggressive competitors intent on offensive engagement who don't necessarily play by the same rules.  The pace of change increases and any firm in a defensive mindset is attacked on all sides, as large and small competitors chip away at valuable customers and products.

Meanwhile there is a growing interest in innovation.  Innovation is offensive in nature.  It assumes there are new markets to address, new customers to reach, new problems to solve.  Innovation is proactive - it forces the firm that embraces innovation to change and it forces the firms that are impacted to change as well.  Given the fact that innovation requires change, both internally and externally, you can understand why some firms would prefer to play defense rather than offense.  Defense in a static environment is fairly safe and predictable, doesn't invite risks and requires little change.  Offense, on the other hand, is risky and uncertain.  As a famous football coach was quoted about the advent of the forward pass, three things can happen when you throw the football, and two of them are bad. 

However, in a market where the pace of change accelerates, and competition increases from every quarter, and the environmental and legislative conditions change constantly, playing defense is exceptionally difficult.  Adapting to the changes and anticipating and taking advantage of the changes is paramount.  In conditions such as these, you can't simply play defense - you must play offense as well.  It used to be said in football that offense brought the crowds but defense won the championships.  That may be true in sports but it is not true in the business world.  Firms that believe they can survive in these market conditions by defending turf are bound to lose, while those that innovate are more likely to survive and thrive.

Think about the cognitive dissonance associated with the change from a defensive minded approach.  In football terms the difference between Mike Ditka and Joe Gibbs.  Firms that have been comfortable in a defensive minded approach are fighting off competitors, extending existing products and optimizing their operations.  Good defensive approaches ward off competitors, consolidate logistics and build up defenses like patents and other protections.  However, they also impede the ability to move quickly and shift direction.  Offensive minded organizations tend to seek advantages, are willing to move quickly and address new opportunities.  They think on their feet and attack where they have opportunities and advantages.  The methods and concepts are radically different, and trying to shift a company from a defensive mindset to an offensive mindset - from business as usual to innovation oriented - is a time consuming but highly necessary process.
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posted by Jeffrey Phillips at 6:01 AM


Blogger Judy said...

Love the sporting link - very topical with the start of the football world might also like the innovation techniques the boffins at City Uni London have been coming up with...less football but an attempt to give the financial situation some rehab starting with the CIty of London see

9:15 AM  
Anonymous Anonymous said...

I am all three. I think people think and educate to much. I have a sense, like a 7th and I am sure there is a common factor of people like myself.We are nover regonised until we are dead, ionstead of learning why we are different and how we could make a difference for export in our own countries..We need to find people like myself so they dont waste there life time finding what they need to find and know, you need to use these people and look after them.
I have lost everything through something you dont mention PASSION this is the key if you would like a book I have it coming...The pit falls of an invention that know one wants to know, but there is so many crooks in the investment of this space...Judy Blyth.

2:46 PM  
Anonymous Anonymous said...

THANK YOU! This is exactly what I've been trying to articulate to my company. I currently work in Sales Development. The structure has been a mess for 4 years. The account managers within this department currently are tasked with both 'defense' and 'offense'. Who ever heard of such a thing? One team playing both roles? IT DOESN'T WORK! Let's not even get into strategy! Good lord! It's amazing we've managed this long. But during this 4 year period it's disheartening to know how much time has been lost because of the blind eye of Upper Management and the archaic processes, rules, and structure (play book) they hold near and dear. I love the company = PASSION. This has been the only saving grace throughout. But clearly needs to be combined with true leadership and effective game plan! Oio! I love you for posting this - !

9:30 AM  
Blogger felicity said...

Progress is a nice word. But change is its motivator.
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7:32 PM  
Blogger better ck said...

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8:30 AM  

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