Whether you’re a regional technology reseller or a global online retailer, the desire to innovate business processes to drive sales and profits can backfire in big and small ways if your organization doesn’t establish a realistic framework to actually innovate.
Lots of companies talk about innovation. Some might even invest in new software or equipment or employees to create the illusion of innovation. But it takes more than a well-intended vision to create actual, meaningful change.
It’s also risky.
Beyond the obvious financial risk/investment in new technology, successful organizations understand there are other costs – psychological and structural – that need to be accounted for on the road to reinvention. It won’t work if your organization is more concerned about appearing to be innovative than actually doing the decidedly unglamorous work required to make it happen.
“I think people dress up for innovation,” Beth Comstock, the former vice chair of General Electric and author of “Imagine It Forward: Courage, Creativity, and the Power of Change,” said during a recent Recode media podcast. “They pretend like they’re innovating, but they don’t want to do the hard work.”
This aversion is both paralyzing and understandable. Monthly and annual sales targets wait for no one. There is suffocating pressure on old-school companies to be two things at once: a viable entity that continues to deliver value and profits as it has for years and, simultaneously, one that’s reinventing itself on the fly to remain relevant and prosperous into the foreseeable future.
This balancing act takes a toll on rank-and-file employees and managers alike. Introducing new technology, new products, new services and, in some cases, new business models into an established organization is not for the faint of heart. Often, these embryonic undertakings fail because expectations were too high, the scope was too broad or management didn’t give the people charged with innovating enough time or support to see it through.
“The old GE way was … we end up throwing in $200 million and we had to write the business off as opposed to what we should have done and what we ended up learning how to do,” Comstock told Recode. “Let’s invest $10 million with one customer to get it right. Then we can invest $100 million when we’ve proven that we’ve gotten it right.”
Starting with smaller, more manageable projects where the stakes aren’t so high provides room for failure and adjustment. And there will be plenty of both. It needn’t be an organization-wide pressure cooker of a situation.
Whatever innovation means to your organization, it should be collaborative and educational in nature. If it’s not, people tend to fall back on what they know has worked in the past at the expense of embracing the new processes and ideas that create true innovation.
It’s also important to recognize the tools of innovation today are much different than they were 10 or 20 years ago.
According to Westwood Capital, a New York City-based investment bank, roughly 48 percent of all business investments in 1998 went to new structures and industrial equipment and 30 percent was allocated for technology such as information processing equipment and various types of intellectual property. By 2018, those categories flipped, with 52 percent of all new investments going to technology – the intangible stuff – and only 28.6 percent for new buildings and equipment.
That’s why it doesn’t really matter if you’re selling automobiles, bagels or MFPs. Technology is driving innovation and it’s rarely plug-and-play. Participants at all levels of the organization must be empowered and rewarded for bringing their ideas to the fore – even when those learning experiences result in “failure” or a final product or process that’s much different than how it was originally envisioned.