Innovation Strategy vs. Culture of Innovation
Here’s something to think about: Strategy vs. Culture when it comes to disruption and innovation in large enterprises.
More and more of the large enterprises under duress and pressure from clients are trying to become more innovative. I would love to say that many are embracing the merits of mindful disruption, but from experience I would say that they are yet not very comfortable with disruption, BUT are trying to become much more innovative very rapidly.
There are many ways to become more innovative. The oldest trick is the art of acquisition. If I acquire very hip and entrepreneurial companies, my company will change and we will become agile and innovative as well! Wrong. Many examples continue to show us that this is a very ‘expensive’ myth.
That leaves enterprises with a few other options:
- Develop and deploy a strategy of innovation (build and sell innovative products). Let’s call this Plan A.
- Secondly, actually change the culture of the company to start becoming organically innovative. Let’s call this Plan B.
For a large enterprise of over say 100,000 people who have operated in a particular manner for almost ½ a century, culture change is extremely difficult. Trust me, I do this every day and I can tell you that the ‘effective’ pace of change is quite slow. In ProVoke, we discuss the 5 stages of resistance to change and in plan B, each stage is painfully real and slow. To meaningfully change a culture (Plan B) will take a very long time, but a great necessity, nonetheless.
So, the most natural and du jour process to become innovative for large enterprises is (Plan A), which is to develop an uber-executive Innovation-Plan and then encourage tons of people to adopt the new strategy. Often, by the time this strategy reaches the clients, it is no longer an innovation plan, but rather a corporate strategy. That is where this plan falls apart. Yikes! Why did our innovation strategy become a corporate strategy? What happened to our innovation plans?
Why does innovation matter? Why is there such pressure to innovate by large companies? Many reasons. Two in particular in the context of this discussion are:
1) Clients are no longer satisfied by large enterprises parading their product catalogs to clients and sharing mega-sized PowerPoints of their offerings. Clients are demanding innovation by their vendors (the large enterprises). In parallel, highly conservative clients are okay with working with smaller more agile startups, hence pressure building up for large enterprises. Appetite for risk is growing. Agility is key.
2) Clients have to become innovative themselves and are looking at their large enterprise relationships as the nirvana – the way to evolve and become innovative. Clients want to become hot and hip companies to recruit and retain great talent and be innovative, so large enterprises are now required to be genuinely innovative.
Under the current pressures from clients, large enterprises are adopting Plan A, developing and deploying innovation strategies to meet/exceed their client expectations. Plan B is the genuine plan, the real deal! Changing the culture is essential but takes time and dedication. Unfortunately, at times, an innovation strategy of a company looks nothing like ‘innovation’, rather it is a business plan.
Sprinkling the words disruption and innovation in a basic business plan, does not make it an innovation plan! It is simply a strategy and does not reflect a culture change.
So, I want to leave you with the following thought until my next blog: Strategy is great as it is the cookbook for ‘how-to’ successfully innovate. Risk free, as all the ingredients are measured and the outcome is assured by the recipe. Tested and tried and will yield results. That is Plan A. However, the culture is not changing. In the long run we need to evolve the culture to not only embrace disruption and innovation but to DRIVE innovation. Does Plan A allow us to achieve long term success in innovation? How do we achieve Plan B?
I spend my time in this beautiful intersection of Plan A and Plan B. We will continue this discussion as the answers are not simple, but there are some great hidden gems as we explore disruption and innovation in large enterprises.
What do you think?