Many business organizations struggle with innovation.
The bigger, more growth, the more companies struggle. Jeff Bezos acknowledges this.
Yet it’s clearly not the case, as John Rossman shares in Think Like Amazon: 50 1/2 Ideas to Become a Digital Leader.
We’ve shared ideas in the blog on the importance of Innovation, including 32 blogs on Outthink the Competition.
Several of my customers have used these resources to innovate. One customer will add close to $2M in new revenue from a service they added through Outthink the Competition in their 2019 annual planning process. COVID19 has accelerated its viability.
Rossman points out many company’s squash innovation and invention because they want predictable results—a predictable time frame, predictable investment, predictable financial returns with moderate risk. This is how a private equity company invests. There are times when this is the right mentality.
Nothing has been predictable in COVID19.
When you’re creating new, innovative customer features or developing new business lines, your investments, risks, and returns are harder to predict. The job of a successful innovator, in times like these, is to act like a venture capital firm.
Innovation Requires a Different Mindset
The key is to maintain a balanced investment portfolio and understand the differences among its segments (See the chart here).
High-risk investments need to be small experiments to prove key aspects before scaling.
Think big but act small.
Rossman’s Idea #9 from Think Like Amazon: 50 1/2 Ideas to Become a Digital Leader: Innovating requires a different investment and governance mindset than what most companies typically have. If you define, manage, staff, and evaluate innovation investments the same way you do less risky investments, the system will not lead to the outcomes you’ve intended. You need a different governance framework.
To create significant departure and disruption from current business practices, the teams within your company dedicated to creating innovation need to be separated from the teams representing the status quo. How does Amazon do it?
At the company I work with, one person, their sales & marketing manager, essentially oversees this innovation. They’ve hired another salesperson to help grow the platform and established a dedicated support team to deliver outcomes.
At many companies, you can identify a leader’s importance by the headcount and expense budget he or she manages. Not at Amazon. Senior people are often dedicated to leading new big bets.
This agrees with Jim Collins Practical Discipline #3 Where to Put Your Best People: Good To Great. It’s simply states: 3) Put your best people on your biggest opportunities, not your biggest problems.
Innovation Starts with the Customer
Clearly, Amazon’s innovative formula works better than other companies. Watch Molly Dobson, Head of European Business, Industrial & Scientific Supplies (March 2108) at Amazon explain how the Amazon embraces and supports innovation.
Trying to change, attempting to innovate, using the same system you’re currently under can be a recipe for continuing the same languid, lethargic pattern you’re currently in.
Disruption is changing business dynamics as we’ve shared this graphic many times. COVID19 is accelerating this Disruption trend.
Remember to change, you as the leader must change. Gandhi said, “the change you want to see in the world.”
The entire organization cannot be transformed if you fail to change your own personal habits.
Is it time to change your pattern of outcomes and innovate with a new approach?
If your business needs to reconsider its innovation practices, we can help. Please contact us today to schedule an exploratory meeting.
Growth demands Strategic Discipline.
To build an enduring great organization, requires disciplined people, disciplined thought, disciplined action, to produce superior results, and make a distinctive impact in 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.
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NEXT BLOG – Gain Clarity: Write a Narrative
Innovations are not ideas; neither are they attempts or prototypes. Innovations consist of new capabilities that affect customers and generate new revenue, improve quality, or decrease costs. The fundamental mistake leaders make on innovations is not seeking clarity, especially regarding the customer experience. How does Amazon gain clarity for its innovations? Narratives. We’ll explore what narratives are, and why you should consider building a similar tool for innovations.