Monday, September 15, 2014


When is the best time to innovate?  We get this question all the time.  Some of our clients know they need to innovate, and what's more they want to innovate RIGHT NOW.  Typically the "right now" crowd has encountered one of two conditions.  Either they are getting crushed in the market by a new competitive product, or they are crushing the competition.  Most "RIGHT NOWers" are on the far ends of the bell curve, well ahead of the competition and planning to stay that way or well behind the competition and forced to make a definitive move.

If you know your statistics, and, let's be honest, who doesn't enough a great statistics discussion, you know that in a normal distribution a vast majority of the population lies close to the mean.  That in turn tells us that the vast majority of companies aren't in the "RIGHT NOW" mindset.  They are in what I call the "AS SOON AS" mind set.  That is, they'll get around to innovation as soon as the markets improve, profits increase, customers pressure them for new products, and so on etc.  The "AS SOON AS" businesses are operating on a historical premise that will inevitably catch up to them.  That premise is the concept of "steady state".

Steady state is the point in a process where things are at an equilibrium, all inputs and outputs as expected, all environmental conditions normal.  In other words, normal working order - no surprises, no changes, no abrupt transitions.  Most organizations argue that they need to get to "steady state" - the ability to think and work without those pesky interruptions and dastardly competitors - in order to think about innovation.  They need less distraction, more focus and more time to consider innovation before implementing any action.  This "strategy" is doomed to fail for several reasons, most of which have to do with circumstances far beyond their control.

The urgency and pace of change has increased, and as it increases many other factors and conditions change as well.  Consumer appetites and expectations change.  Competitors change.  New products and solutions emerge.  The frequency and pace of interruptions, dislocations and new entrants increases.  I'm sure in the not too distant past that Kodak had some good ideas about how to compete with the growing impact of digital photography on the film business.  They were simply waiting for a breather, a pause in the pace of change, so that they could catch up and do some good thinking that would lead to innovation.  The problem is that once the whirlwind starts up, it feeds itself.  Technology is rapidly changing and will continue to do so.  The advent of social media means that more people are aware of new ideas and solution in less time than ever before.  A more highly educated population with more disposable wealth means we can adopt new solutions faster than ever before.  There's no time, no pause, no breathing space.  And if you think you've found some breathing space, you've probably simply stumbled into a solution space that's been abandoned, like finally releasing a Betamax upgrade only to discover that everyone's gone VHS.

In the comfortable, familiar past of Happy Days, Leave it to Beaver and the age of Disco, the pace and tempo of competition was much more sedate.  In those days you could anticipate competitive change, spot the rise and fall of good products.  Long product lifecycles weren't a luxury, they were the reality.   In a protected market with few competitors you don't need a lot of innovation, you need a lot of marketing.  As the world changed and more competitors entered, industry didn't need innovation, they needed to cut costs.  They needed more efficiency.

But what do you do when every firm and every competitor runs full speed on high efficiency, but consumers demand new solutions?  The breathing space necessary to think above the fray of incessant competition isn't coming.  You've got to be good at two wildly divergent things simultaneously:  you've got to be good at holding down costs, building and delivering solutions effectively, and you've got to be good at creating new products and services based on unmet customer needs that may lead you into new markets or new business models.  You've got to constrain the scope of your business at the same time that you explore all of the boundaries or adjacencies.  And this is where most businesses fail today.  They don't believe they have time to do both.  And they are right.

There is no steady state - no breathing room, no competitive pause.  You know you need to innovate, but you put it off, joining the "AS SOON AS" crowd, safely tucked into the majority.  But what that majority doesn't recognize is that the expectations and means are shifting.  Increasingly we aren't talking about a bell curve, but a curve that has shifted to demand far more innovation.  Now, what will you do in an organization that is optimized for efficiency and needs time to shift gears to even consider innovation, much less put it into practice?

Recognize now, today, this moment, that your organization has to be ambidextrous, doing both efficiency and innovation exceptionally well.  It's like juggling a fragile egg and a running chainsaw at the same time, while being pelted by body blows by disinterested customers and aggressive competitors.  The sooner you realize that "AS SOON AS" is today, and that the opportunity to sit back and think about innovation isn't coming, the better for your business.  I hear people talking about innovation as if it is a choice, and to a certain degree they are correct.  Innovation is a choice in the same way that you have a choice to continue your business or shut it down.  Once you realize that there is no choice, and there is no breathing space, you'll arrive at the only real conclusion:  it's time to create a sense of urgency and passion about innovation, or to go into another line of work.

And yes, I know your people are busy, occupied with lots of important stuff.  I know the customers, regulators and competitors are demanding.  If you think they are demanding now, about your existing products, just wait until they discover you don't have anything new coming out of the funnel.  Their reactions will become a vicious circle from which you will not escape.

Right now versus as soon as is a Hobson's choice.  In fact there really isn't a choice to be made.  It's either RIGHT NOW or NOT AT ALL, with all the issues NOT AT ALL contains.  
AddThis Social Bookmark Button
posted by Jeffrey Phillips at 7:57 AM


Post a Comment

<< Home