To Innovate or Not to Innovate – Now That's a Question.
Hamlet’s line “To be or not to be…” is one of Shakespeare’s most famous. And he did write quite a few good ones. Hamlet’s concern is a choice between living a troubled life; and embracing death. OK, it’s a fairly deep analogy when it comes to innovation, but the choice of embracing or avoiding innovation choices can lead to corporate death – think Kodak.
While Hamlet appears to seriously assess the pros and cons of life and death, I’m not sure the evaluation of innovation is always as fair. There is a lot of in depth analysis, modeling and risk evaluation about the innovation option. The alternative “as is” scenario usually assumes that current momentum and trend growth continues. The point of this blog is to argue that the same depth of analysis and consideration should be given to the choice of not developing or implementing a particular innovation.
There is an old adage that if you continue to do what you’ve always done in the same way with the same people, you’ll get the same results. I don’t agree with this. I would argue that business would decline, because competitors are unlikely to be taking the same laissez-faire approach. So while the risk of not innovating may be greater than implementing it, it’s not always appreciated.
I’m not advocating a foolhardy implementation of innovation for it’s own sake. Innovation is all about doing something new that adds value, which does good things for customers and grows the financial top and bottom lines. If it doesn’t do any of this, then of course there may good reasons for not doing it. But when market decline, heightened competitive threat, consumer irrelevance or other seismic factors will seriously damage your business, the momentum trend line is not a fair comparison.
What are some of the objections to innovation that argue for not doing anything?
1. It will cannibalize our existing business.
Nobody has a monopoly on creativity, smart people and excellent execution. So if you’ve identified the opportunity and decide not to do it, somebody else might just go ahead. The same argument applies whether the cannibalization is of top line revenue or profit margin.
Blockbuster decided they had too much invested in bricks and mortar to move online. So Netflix did it for them. Kodak decided not to enter digital when it had the technology to do so because it would have been a lower margin than film.
2. It opens up a new segment that we don’t own.
Every business wants to have a leading market share if at all possible. Segment leaders feel comfortable, but if new opportunities are presented which potentially change the nature of the business, it becomes the classic innovator’s dilemma. Such disruptions don’t need to be imminent, they can also appear incrementally over time. Leaders should always be aware, and evaluate the “carry on as we are” alternative with a healthy dose of paranoia.
3. It’s too expensive to implement.
That may well be true. But is it a fair comparison with a realistic financial assessment of the “do nothing” option? If it’s a fair, objective comparison, that’s fine. The challenge then is to the creativity and resourcefulness of the people in the firm, to find ways to make the innovation work using alternative approaches that may be more cost effective.
4. It’s not our business.
That depends how you define your business. If it’s too narrow, you’re in danger of being squeezed out of existence. If it’s too wide, resources may be spread too thinly and you may not be competitively competent in the areas that matter.
There are no easy answers, every company and industry have their own characteristics that need to be taken into account. Ultimately, as long as both the launch and don’t launch scenarios are given the same in depth treatment, it’s then down to leadership and judgment. I’ll leave the final word to Shakespeare –
“There is a tide in the affairs of men which, taken at the flood, leads on to fortune; omitted, all the voyage of their life is bound in shallows and in miseries.”
image credit: two arrows image from bigstock
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Kevin McFarthing runs the Innovation Fixer consultancy, helping companies to improve the output and efficiency of their innovation, and to implement Open Innovation. He spent 17 years with Reckitt Benckiser in innovation leadership positions, and also has experience in life sciences.
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