Thursday, June 10, 2010

Why firms don't innovate: an alliterative list

I was meeting with a group that is interested in fostering innovation in the state where I live and we were talking about the reasons why organizations don't innovate.  We talked about the lack of strategy and cultural barriers and a number of other reasons.  There are hosts of very smart people writing books and research papers on this very topic, but it struck me that I should be able to communicate the reasons firms don't innovate in a way that a fifth grader can understand, since some of the folks we work with..never mind.

At any rate, I created my alliterative list of reasons why firms don't innovate, and if I get the time I'll explore them in more detail over the next week or so.  I encourage you to add your own reasons in the comments - alliterative or not, they are welcome as we begin to first name the reasons, and hopefully eventually debunk the reasons why firms won't or can't innovate.  Herewith, Dr. Seuss meets Clayton Christensen.

Reasons your firm can't or won't innovate:

  1. The Tyranny of Today.  Yes, I know that most fifth graders may not fully understand the word tyranny, but they understand the pressures of delivering "today".  Most businesses are so focused on delivering this week, or this month, or this quarter that they simply cannot or will not think beyond some corporately directed and reinforced time horizon.  I've written before about the use of scenario planning and future forecasting to identify opportunities that are beginning to unfold.  Very few firms use scenario planning effectively and most are comfortable reacting to market changes rather than being the "leader".
  2. The Safety of Sameness.  Innovating requires that you create strategies, products and services that make you different from your competition.  As a firm gets larger and industries or market mature, being "different" seems risky or threatening.  I was driving by my bank branch recently and it struck me that all bank branches look exactly the same - a squat square building with few windows and exactly three drive up alleys.  I'm sure most are exactly the same on the inside as well - exactly three teller windows, a velvet rope alley to guide customers to the tellers, with offices along the periphery.  Why is every bank and every branch so similar?  Because there is safety in sameness.
  3. Inevitable inertia.  Innovation is change, and as we all know change is difficult.  One of the reasons change is difficult is simply overcoming the inertia of the way things are currently done.  Even when change makes a lot of sense, overcoming the inertia that sets in around the way things are done is difficult.  Since innovation is typically risky change, the inertia is even more pronounced.
  4. Creatures of the Culture.  An organization runs on unwritten rules and informal processes we lump together in something we call culture.  Corporate culture guides and dictates our thinking, and encourages activities and discourages activities and perspectives as well.  We are all creatures of the culture of the organization we belong to.  A culture can encourage innovation or discourage innovation.
  5. Fear of Failure.  No one likes to fail, but innovation simply requires the ability to fail and keep going, incorporating the learning from the failure rather than punishing the failure.  If the organization promulgates a fear of failure, it can't innovate.
  6. Containing the creativity.  Innovation requires creativity and divergent thinking.  Any company that doesn't promote creative thinking stymies innovation, since all ideas seem so similar to existing products and services.
  7. Cannibalization Concerns and Turf Toughness.  Many organizations are afraid to innovate because the new product or service may undercut or obsolete an existing product or service.  So these firms defend the existing products at the expense of new ideas and new products, and are disrupted by another firm.  Additionally, a new idea may intrude on someone else's "turf" - that is, someone else believes the idea should belong with their team and they resist it.  Don't underestimate the power of a bureaucracy that feels threatened.
These are the reasons why firms can't, or won't innovate - not an exclusive list, but an alliterative list.  What we should address now is:  having named our fears, are they really all that terrifying?  Are they really that difficult to overcome?  I think the answer is obvious.  Some of these challenges may entail a significant amount of work, but it's not hard work or difficult work, or work for rocket scientists.  It requires focus and commitment, but there's little here that any business so inclined can't do.  If we can draw that conclusion, then the next question is:  if these are the barriers, and they aren't really all that significant, why don't we see more firms innovating?
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posted by Jeffrey Phillips at 9:07 AM


Blogger felicity said...

Progress is a nice word. But change is its motivator.
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Blogger better ck said...

Thanks a lot for this time sharing of innovation about WHY FIRMS DON'T INNOVATE: AN ALLITERATIVE LIST. This is really the best website about innovation i have ever read.
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