Evolving from Delivery to Growth. Ideation, Innovation, Marketable Innovation
One of the areas where I spend a lot of time on with my clients (and I am very passionate about) is how do we enable innovation in a large company? Large enterprises have massive pools of technical talent, have clients, and a global market reach. So why are we not seeing more innovation from large companies?
A few observations:
“Great Ideas” are not the same as “innovation” or “marketable innovation”. A brilliant idea which the market may not accept or want to pay for, is simply that- an idea. Ideation, as we call it, is different than innovation which is different than executable innovation. When employees get frustrated and express to me how their ‘innovation ideas’ are not accepted, I ask them to write up a 2 page business plan, as if they were an entrepreneur. I ask them to explain the market potential, pricing, competition, viability and resource requirements. Many lose interest at that point! Serious innovation is much more than an email or PowerPoint to your boss!
- In addition, significant innovation ideas need to be disruptive and game-changing. This requires detective work, agility and conviction. In large companies, integrating disruptive innovative offerings with existing product offerings is a great way to get started. For example, if you are a telco company, there are many new and significant business innovations which you can disrupt and expand on. Which of these sets your company apart and makes your company visible? How will the market respond?
- Large enterprises become successful and large because they perfect the art of ‘Delivery’. They need to flawlessly deliver what customers want and need and be able to massively scale up. This is critical to serve large markets if you are a products or services company. Hundreds of thousands of highly talented staff focus on landing large contracts, delivering exactly what the customer requires and increasing market share and revenue year-on-year. They work to keep the client extremely satisfied and building long term relationships. Disruptive innovation and Growth (growth-based diversification) is quite different. It is more focused on identifying new/emerging areas of growth, investing to succeed, taking risks and playing in areas which may not be your core strength. The crossroads of delivery (D) and growth (G) is the space I find fascinating to work on with large enterprises.
- Innovating in large enterprises requires that we find the bridge from D->G. The obstacles range from cultural, political, reward systems, fear of risk, lack of certain skills and key topics which we will discuss at a later time. To evolve the Culture of Delivery to the Culture of Growth & Innovation we need to accept that there will be disruption. This is disruption in the most positive sense. Fear and resistance to disruption is fatal!
- Irony: Large enterprises will find that their clients are in turn looking to evolve from D->G as well! Clearly, we need to do the transition mindfully and protect the revenues of the company, but almost all companies want to be innovative and growth oriented. Over time, delivery based companies cannot maintain their lead as agile competition will gain momentum.
So, let’s start the dialogue of Delivery vs. Growth and how to enable the disruption. How do we become more agile and responsive and more focused on diversification and growth while maintaining our lead in the industry? Would love to hear your thoughts. The conversation has just begun…
I don’t understand why you are claiming companies need to transition from Delivery to Growth? I would claim they are intrinsically linked. A company needs Growth to drive Deliveries. Conversely, Deliveries bring in profits which allow for Growth.
That said: for a company to grow through innovation three things need to happen. First, company leaders have to make innovation a priority. They have to be willing to spend the over-head to support experimentation and innovation which do not bring in imidiate revenues. Second, the company needs to give their employees time to innovate. The employees need dedicated time to work on innovation projects. They cannot be expected to just use their “down” time to make innovation happen. Third, the company needs to reward employees for innovation successes. The innovation employees need to understand that they will receive credit for their ideas and will share, financially, in the success of their ideas.
Clearly you can have a process for innovation as did Tom Edison. Most progress is evolutionary and not revolutionary until some tipping point is reached. Social networking couldn’t happen until everyone had a computer, Useful PCs depended on fast chips. Smartphones depend on small chips. So what you can innovate depends on what time period you happen to be in. I remember in the ’64 worlds fair in NY the GM pavilion had a futurama exhibit which featured the picture phone. The idea was there but it took 50 years for me to have one.
Major Innovation is disruptive in large companies but they have the resources to deal with it. The average company doesn’t make it more than 40 years and smaller companies have a higher failure rate then large companies. And that is probably ok. Does anyone miss RCA.
Like I say below, Steve, it’s often all in the timing. Picture phones didn’t come to market on their own right, or even from within telephony; it took the confluence of cloud, video streaming, and millenial’s appetite for online communication to make technology like Skype main-stream, and for wireless carriers and Apple to develop integrated hardware that can support apps like Facetime.
Much success in entrepreneurialism comes from having good timing, and that is especially true for innovation within large organizations. The market, and the organization, must be ready for Delivery for Growth to occur.
In my career with large technology organizations, and I’ve seen good ideas fail several times before finally succeeding. Sometimes, the ideas changes and matures over time, as do its champions. But so does the market, the customers, and the supporting technology.
While large orgs are often expert at Delivery, successful enterpreneurs inside of established organizations know that to spur real change, an idea needs to be refined, ready, and polished, so that it’s ripe at just the right time that the organization can embrace it.
Linda, another thing to think about as you move from a culture of Delivery to one of Growth and Innovation is the optimum speed of innovation that your customers are willing to withstand. Everytime you evolve, your customers will have to too. I think the optimal level of innovation will be very different depending on the industry you’re in. Software as a industry is full of rapid adaptors. A healthy paranoia exists to adapt or die out. On the other hand Aviation as an industry tends to make slow and incremental adaptions and change. You’re right, the crossroads of Delivery and Growth is facinating but how companies, large and small, make this transistion to Growth and Innovation will depend highly on the customers they serve.
The bridge from delivery to growth depends on if there is in fact a tradeoff between growth and discovery. That primarily depends on industry, competitive forces and internal environment. There is also a time element, delivery is short term and table stakes for any business. If you can’t deliver you won’t be in the game at all (R&D think tank groups aside), however, if you don’t discover you won’t grow and you won’t be in the game for long. Successful delivery = short term growth, successful discovery + delivery = longer term sustained growth, but our quarterly performance driven economy prioritizes the former.
large companies could also be reluctant to innovate in some cases because they does not intend to innovate above the threshold. Or large companies know there threshold innovation and thus need to focus on a mix of other elements to become a 10X company. The mixture of innovation, creativity and discipline. Companies could provide reasonable budget & resources within several departments that encourage diversification and growth without impacting productivity.
I have looked into some European Corporations and noticed they have 2 CEO’s. A good test would be to have one CEO that excels at delivery systems have their job objectives tooled to that component of the company only. On the flip side the other CEO would be in charge of creative/innovative ventures and only handle tasks associated with those activities. This way you get innovation focus with the experience to scale it to market. The CEO’s do not have to worry about being assessed on something they do not do well. Problem with doing that here is no one wants to power share.
This is a common issue in my own company that is fairly innovative itself. Too often ideas are generated that have not been fully planned out, or don’t provide the financial support and backing to make a compelling arguement for change. Getting senior management to even listen to an idea without the full backing of a business plan is an exercise in futility. But I think therein lies the problem; many of the employees that you’re directing this to don’t have the resources or knowledge to create a business plan to generate the buzz needed to bring their idea to the right audience. Organizations should offer some framework that requires employees to provide this information so they can start building a business plan wihtout even knowing that they’re doing so. This would allow grass root ideas in large organizations to come to the surface further developed, garner more interest and help develop the strategic thinking of the employees attempting to innovate.
It’s clear that both delivery and growth are necessary in order to continue to compete in today’s marketplace. Delivery is critical to current revenue streams; without delivery a firm will not even be around to compete tomorrow. Growth is about continuing to evolve and looking ahead to the future.
What may not be immediately obvious is the tension between the two. There is competition for resources within the organization. Which should the culture address – delivery or growth? They require mindsets which can be significantly different. I believe they can be balanced and that the organization can create a culture that values and rewards both.
The other aspect is that sometimes growth will impact delivery, which creates more tension between the two. Current product lines will be impacted by the introduction of products driving future growth. For example, Microsoft knows that launching Office 365 will affect sales of its Office desktop software; however if Microsoft had not launched a cloud-based offering it would continue to lose market share to Google. The challenge is to balance growth and delivery, especially in large enterprises.
I am just having a lot of trouble with the generalization of the terms “disruptive” and “innovation” at this point. We talk about things like “investing to succeed” in these conversations, but there is scant detail on what exactly that entails. I understand the point is to make some generalizations in this type of space to focus on broader topics, but sometimes this leads the point to being extremely vague. I would just prefer that we stay away from the desire to throw in catch phrases when ever possible to describe things that need more in depth discussion.
That being said, the need to be mindful of your delivery while enabling growth is a sticky point. Enough resources must be maintained to allow innovation to succeed, while serving the market you already have. The question then becomes, how do you position your company to devote enough resources to both sides of this argument, while fostering a culture that allows employees to be innovative? I think the answer lies somewhere in the void of what disruptive technologies existing and potential clients are willing to discuss with those who are delivering their products.
From my understanding for any company to be successful with its products it has to optimize its mix of delivery and innovation because different stages of product development demand different mix of delivery and innovation. These two have a symbyitic relationship where they both need each other rather than just one
In general all these large companies were expected to do performance consistently well by the market. Any kind of change can’t be rolled out easily across the company because of accountability issues. delivery is important to meet the market expectations. But for a company to excel in the industry and wants premium for their stock it is important to innovate. All these large companies should think about having a way to communicate new ideas, innovations which should be reviewed by the expert team and decide which can be taken further along or leave it. Without innovation and adopting the change any large company will die just like Kodak. Better react and do work when needed sometimes reacting late won’t produce results.It is not uncommon that many companies have research groups for innovation, it doesn’t others are not allowed to innovate, but at-least people work in research labs will have more time to experiment and innovate.