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Big Ideas for Small Business Managers : Innovation makes your product superior and your customer muc

31 Aug 2015 - {{hitsCtrl.values.hits}}

Today’s managers are full of ideas, theories and information. They have extraordinary knowledge and expertise and are highly skilled at traditional business thinking. Yet, many feel uncertain and unmoored. They find planning for the next quarter a tough challenge, never mind committing to decisions that will play out over one to five years.

What has gone wrong? One senior executive told me, “We’ve lost our crystal ball.” No management guru can give you a new crystal ball. But he will tell you that being an innovative leader holds the key to discovering what’s new, what’s better and what’s next.

Why is creative thinking important to business? Especially small business? After all, business is about numbers, sales projections, customer service and tangible things like that which can be felt and touched. Right? Well, yes…and no.

Numbers and sales figures are incredibly important to business growth. But so is creativity because creativity spurs innovation. Innovation drives progress. And innovation grows business.

Think about Microsoft and Apple. Think about all the wonders we’ve seen in the last 50 years. The remote control, man walking on the moon, personal computers, microwave ovens, communication satellites, the Internet…we can’t even begin to list them all.

The point is, these inventions transformed our world…and built companies and fortunes. And all started with an idea born of being creative.

Advantages
Innovative thinking is very popular right now in most developed countries and for good reason. The corporate world is beginning to realize the importance of innovative thinking and how it allows us to be real leaders in world technology by being more creative and competitive.

Innovative thinking is what enabled companies such as Honda, Toyota and Nissan to take a huge market share from industry leaders such as General Motors and Ford, who somehow lost their capability to innovate (while most U.S. automobiles were made by hand, the Japanese employed robots). While U.S. autos were getting 16 miles per gallon (MPG), the Japanese autos were getting as high as 30 MPG. Their cars were efficient, inexpensive and reliable. Even today the Japanese continue to surprise us with innovation.

Innovative thinking is about more than retaining or growing market share; it’s about creating new products and services, discovering new markets for existing products and services and improving the existing products and services, which all result in greater revenues. Innovative thinking isn’t limited to the tangible; it can be applied to systemic issues, human resources, product delivery, market channels, sales, marketing, public relations, finance, ecommerce, web design and even advertising.

Training
The Sri Lankan culture tends to idolize organisational leaders as heroes and we want to think of individuals as the prime cause of success like innovation. We write case studies about path-breaking organisations and innovative ideas and generally attribute the innovation to the individual leader, the great, daring, breakthrough thinker. No wonder that when we set out to create training and development for innovation leaders we tend to think about the individual leader. And as a consequence, we tend to think about what individuals can do in an organisation to create or encourage innovation in other individuals.

The problem arises from not asking the right strategic question at the outset, viz: “Is the primary cause of innovation people or systems?” Setting aside the centuries-old debate over nature vs nature or people vs. conditions, think for a moment about causing and specifically ask the question: “How do we cause innovation?”

Here is a deductive reasoning for consideration as an answer to that question.

Innovation is a product of culture
(not individuals).

Culture is an emergent factor of systems
(not individuals).

Therefore, systems drive innovation
(not individuals).

If the logic and assumptions of this deduction hold, then you may find that the most critical aspect of building an innovative organisation – systems – is absent from your training and development planning. As examples of how systems issues can influence your innovation strategy, consider the three characteristics of innovative cultures and ask whether each is more profoundly influenced by individual leaders or systems.

Trust: Innovative cultures are known to have a remarkably high level of trust. People trust other people and the inclination to trust is simply an assumed value. If your goal is to infuse trust as a value into your organisation, how do you do that? Is it through individuals leading others to value and practice trust
or through the development of systems to cause trust?

Of course, without leadership that values and engenders trust, no organisation can become a trust culture. But leadership in this case is necessary but insufficient. A quick look at systems within an organisation can show that trust as an organisational value may be doomed from the start, when the systems run counter to trust.

Think of ‘win-lose’ structures in incentives. If you can only win if someone else loses, what are the odds of your developing a working relationship grounded in trust? Where systems operate to constrain trust, no amount of leadership will serve to create trusting relationships. Systems drive trust,
not people.

Diversity: Another known feature of innovative cultures is diversity of people, points of view, ideas, ethics and beliefs. It is self-evident that innovation requires looping, constant challenge, testing, playing and randomness. Innovative organisations require leadership that values and welcomes diversity. But again, leadership alone is insufficient. Systems will drive (or diminish) diversity much more profoundly than will individual leadership.

A rigidly defined process for success in an organisation — the deeply embedded, powerful processes of evaluation, promotion, recognition and reward that are present in all organisations — will determine more than any other factor, including leadership, the level of diversity within an organisation. A leader can demand, cajole and preach diversity but if the operative systems recognize and promote ‘organisational thinking’, the result will be organisational — not diverse — thinking. Systems will drive diversity, not people.

Risk:Innovative organisations encourage risk and understand failure. Without leadership that understands and contextualizes failure, risk will be a negative organisational value. Yet again, leadership is necessary, but insufficient. Leadership can pronounce and declare ’til the cows come home that risk and failure are a part of the value system in an organisation; but if systems prohibit risk taking and punish failure, the result will be a risk-averse culture. Where organisational systems link personal success to the absence of failure, there will be diminished risk-taking. Systems will drive risk, not people.

So, if you feel a certain level of dissatisfaction with the outcomes of your innovation leadership, a certain unease about your approach to leadership training and development, consider this question: Should you be thinking a little more about how you build systems and a little less about how you develop individual leaders? You might be surprised by where this reflection will take you.

Leaders – and in fact, everyone in the business - must learn to free their minds from the assumptions and paradigms that limit their vision of the future. They must relearn how to use their imagination in thinking about the future, even though this is counter to their years of learning to think only with verifiable (past) data. They must learn to look at problems as part of the whole system in order to see the intricate web of underlying forces that must be addressed to solve problems holistically. And they must learn to anticipate the unexpected consequences of their decisions in a future that may be nothing like the familiar present.

(Lionel Wijesiri, a corporate director with over 25 years’ senior managerial experience, can be contacted at [email protected])

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Big Ideas for Small Business Managers : Innovation makes your product superior and your customer muc

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