“Only those who will risk going too far can possibly find out how far one can go.” T. S. Elliot
Failure to innovate or take risks can eventually take down the most successful companies. Throughout history, there have been countless companies on top of their industry that did not stand the test of time. The same time that allowed competition to take advantage of and adopt new technologies. Although Blockbuster met its demise for several reasons, failure to innovate would be in the top three. In 2000, the CEO of Blockbuster was approached by the founder of Netflix with a proposal to form a partnership. Blockbuster was doing so well, and they already had their recipe for success, so they did not do the analysis and failed to connect the unseen factors. When companies are consistently increasing revenue with little to no change in the business model, it is often harder for them to embrace strategic thinkers. How long will the success of your current strategic initiative prevent you from failing?
Innovation can be creating a new product, expanding to distant markets to address unmet needs, or creating new services and propositions. It is not just about technology these days. A School of Business professor at Dartmouth, Vijay Govindarajan, co-author of The Other Side of Innovation, explains how successful companies are inclined to fall into one of three traps: “First is the physical trap, in which big investments in old systems or equipment prevent the pursuit of fresher, more relevant investments. There’s a psychological trap, in which company leaders fixate on what made them successful and fail to notice when something new is displacing it. Then there’s the strategic trap, when a company focuses purely on the marketplace of today and fails to anticipate the future.”
Risk taking leads to success
When businesses consider risk, they must change their original thinking on the perception of what a risk is. Most people will immediately think of failure when weighing risk, but it is an opportunity to advance and succeed. Think back on any risks that you have taken, no matter how big or small. Once you faced that risk or your fear and there was a positive result, how did you feel? There is a boost in your confidence level, and you are thinking “That was not so bad after all. Bring on the next challenge.” These risks can range from creating a new product, career moves, or even skydiving, but that feeling of success makes it worth taking and makes you stand out.
Nobody is expected to take a risk blindly. All businesses have several great ideas, but those that continue to be successful differentiate themselves in the execution. Educate yourselves on the possible fallout and go through the whole process of what will be considered a success. If you are unprepared for the risks, then you are less likely to benefit however this should not discourage and put you into analysis paralysis. There will be failed experiments that started off as one idea but evolved to important lessons and place you on a new journey. Nothing happens if you do not execute a plan, and without that execution, ideas are just fantasies.
Do you know the original intention for Bubble Wrap? In 1957, two engineers wanted to create 3D textured wallpaper, which did not sell well at all. This wallpaper later turned into an attempt to insulate greenhouses, but Bubble Wrap does not create an insulating effect. A few years later, IBM had a large computer that needed protection during shipping, and the engineers realized they had the solution to the problem. Yes, that same plastic that kids and adults still love to pop today was supposed to be wall décor. Another favorite product, WD-40, received its name because it failed 39 times.
Leadership must recognize that new products, services, and ideas should come from a certain percentage of the business. Some companies see market trends and immediately react. Often they do not know what they are responding to at the time; they feel the need to be one of the first to go with the trend. Patience is a friend to many. Once you have learned what you need to know, and the uncertainty has gone away, then action should be taken. Know what variables are involved from the client side to the employee side so that you have better control of the risk. The one business leading the trends has already been patient and completed the research.
Create a dynamic system to help trigger Innovation
In his book, Diffusion of Innovations, Everett Rogers proposes that there are four elements that influence how a new idea spreads: the innovation itself, communication channels, time, and a social system.
When it comes to innovation itself, leadership should focus on the business problem that needs correction, and help the company fix it. Once that is understood, and then the decision is about investing in fixing the problem, not the technology. Most companies do not have dedicated teams reserved for innovation and experiments, so they will proceed with the methods that got them to where they are.
There are several ways to open communication channels. Colleges and other local resources are ideal places to help foster creativity and develop workflows. The best scenario is for people that are similar in several ways, except in their understanding of the idea, to collaborate. This strategy is ideal because people are more open to interacting with others with whom they relate.
Patience is a virtue when it comes to exploring new ideas. When the plan is not going your way, and it seems like you have been at it forever, leaders must continue to push the envelope. Rumor has it that some companies allow employees to take 10-20% of their time to work on projects that might be helpful to the company. Google had a few products that were started during 20% time like AdSense and Gmail. Maybe it is easier to have a more structured schedule for a group of employees to work on a project for a half day on Wednesdays.
Social systems are a means of spreading the knowledge of a product for creating buzz or gaining feedback on how it will be received. Social media and marketing can be used to get quick feedback. Every market has opinion leaders that have an influence on those that follow them. Between social media and these opinion leaders, a company can get feedback on anything from product design to functionality and workflow changes. Those reviews on the leaked phone images you read probably helped some company realize how unreceptive to certain changes people are. If the company is reluctant to change, then the marketing team will do their magic. Consumers in these social systems fall within five categories: Innovators, Early Adopters, Early Majority, Late Majority, and Laggards. To help put this in perspective, think about the smartphone evolution. When Android phones and iPhones started becoming popular, people worldwide were waiting in longs starting the day before. There was also the preorder crowd and those that decided to wait and see what others had to say, or if there were any issues with those phones. After almost ten years, some people are still holding on to flip phones. In the business world, there are companies treating cloud technology in the same fashion and are reluctant to change.
How to handle failure
Leaders should engage with their teams and focus on lessons learned from setbacks and success. Penalizing failure will stifle creativity even when building on proven products. When you celebrate failure, it is not the same as handing out participation ribbons to the pop-warner team that won and the one that lost. It is more of a retrospective to help understand what went wrong, and how to better plan for the next idea.
In Four Reasons Why You Should Take Risks, Bill Scheessele states, that when “successfully failing, there are five steps: disbelief, fear, anger, acceptance and learning. Disbelief and fear are natural reactions. Anger can be controlled, focused and transformed into perseverance, passion, conviction and desire. Acceptance is an awakening that allows us to understand that every failure is also an opportunity for a new start and fresh beginning. The learning part of failure is quite obvious. Every failure represents a lesson. Every failure adds another level of wisdom.”
The best strategies will fail without proper implementation from the organization. One of the best ways to prepare is to develop cross-functional teams that can strengthen the weaknesses of leadership. It is not a requirement that all leaders need to be technological geeks, and a change in the hiring strategy could help with any deficiencies. Being aware of current innovative opportunities and understanding how the shifts will impact the long-term strategy, is something good leaders will detect.
Did you become complacent or get lulled to sleep thinking all is well?
How would you encourage innovation? Comment below.
Karl T. S. Jackson is a Project Manager and frequently speaks with students from middle school through college about personal development and how personal choices affect their future. He enjoys writing about business, young professionals, personal growth, and personal experiences. You can also connect with him on G+.