Innovation is just a word in the dictionary.
Alex Osterwalder, CEO of Strategyzer, and Business Model Generation: A Handbook for Visionaries, Game Changers, and Challenger’s author, admonished the Metronome’s Tip Top Business Summit 2023 attendees that a goal to innovate isn’t going to make you an innovative company. Only when you have a system to innovate, to continuously explore, validate, and produce innovations will you make yourself an invincible company like 3M or Bosch.
Creativity is not important to innovation. Finding great evidence is where you need creativity. Process and persistence are more important than creativity for innovation.
Osterwalder believes 3 elements build an Invincible Company.
An Invincible Company:
- Constantly Reinvents Itself
- Competes on a Superior Business Model
- Transcends Industry Boundaries
This means your leadership is not only committed to innovation, but your leadership creates the environment and system to consistently produce innovative winning ideas within your organization.
Business Challenge – EXPLOITATION OR EXPLORATION
Osterwalder sees the biggest challenge for existing companies is choosing between exploration and exploitation.
There’s a reason why companies invest more time and energy into exploitation than exploration. And yet while exploitation provides more certainty, each company needs to determine when to invest in exploring. While many explorations fail, they are where your greatest returns can come for the future.
This is why Osterwalder recommends leadership invest 40% of their time exploring the future.
This slide from his presentation provides a comparison of Explore vs. Exploit, and why your business needs to do both, yet to be aware of the differences in Uncertainty, Investment, and questions and decisions surrounding both challenges.
The Danger in Spreadsheets
When your business focuses on exploration, Osterwalder exhorts leaders to be evidence-based. He called spreadsheets to support any decision as “fantasy made explicit!” Spreadsheets are projections, forecasts not based on any evidence. Leaders should focus on evidence that supports the idea. The leader needs to be actively and visibly involved with innovation. Never ask for opinions, ask for facts. Ask questions like, “When was the last time… or Tell me about a time when you…”
Are you focused on the problem? Osterwalder called interviews “light evidence.” Call to action is evidence. Meaning experimenting with testing to discover if your customer will call or respond to the idea.
You need a system to identify successes, and even then, 9 out of 10 innovations will end up as failures.
When exploring Osterwalder believes a business should focus on 3 elements:
Ideas are cheap. It’s important to experiment, asking yourself “What needs to be true for this to work?”
If your business has over 25 people, one person should be dedicated to innovation to build an invincible company.
An invincible company is led by a leader who asks for evidence. Yet committed to creating an environment to support innovation and a system that will identify winning ideas and in which winning teams flourish!
To learn more about Alex Osterwalder watch Business Model Canvas 2:20 video:
To create an environment where everyone is inspired to give their best, contact Positioning Systems today to schedule a free exploratory meeting.
Growth demands Strategic Discipline.
Next week I’ll be taking a short break from sharing more from Metronome’s Tip Top Business Summit 2023. How does your team communicate during work hours? Would you like to see it improve? Guest writer Odessa Powell we’ll share 10 ideas to Improve Employee Communication During Work Hours in our next blog.
Building an enduring great organization requires disciplined people, disciplined thought, disciplined action, superior results, producing a distinctive impact on the world.
Discipline sustains momentum, over a long period of time, laying the foundations for lasting endurance.
Meeting Rhythms achieve a disciplined focus on performance metrics to drive growth.
Let Positioning Systems help your business achieve these outcomes on the Four most Important Decisions your business faces:
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NEXT BLOG – 10 Ideas to Improve Employee Communication During Work Hours