Are you healthy? People who enjoy long-term health don’t have episodic bursts of health. They’re healthy nearly all the time. Their immune systems fight off threats. Can the same be true of companies?
Yes–innovation must be more than episodic. Don’t confine it to a laboratory, a hackathon, a TED talk or a building with a pirate flag. Make it systemic and automatic so that it occurs always and everywhere inside your company.
Why do some companies have a better innovation response than others? From where does such vitality come? From the chief executive? This might be true in a small percentage of companies. But even for those relatively few, it’s worth noting that CEOs don’t stay on the job forever.
From clever strategy? If you think so, then you must believe your strategy will always be the correct one. But in all of history you’ll not find a single company that has always had great strategy. History is littered with apparently solid companies that were suddenly undone by wrong strategic assumptions and bad bets. Eastman Kodak, anyone?
From flawless management? “Abbott Laboratories, Digital Equipment Corp., H.J. Heinz Co., Masco Corp. and J.P. Morgan & Co. have been chosen by Dun’s Business Month magazine as the five best-managed companies of 1986,” begins a Los Angeles Times story on Dec. 1, 1986. Note that Digital Equipment Corp. is on this list. But beneath the headlines DEC’s immune system was already beginning to fail.
From large bets on research and development? That’s certainly implied when you read an annual report in which the company brags about the size of its R&D budget. (What company doesn’t brag about this?) But R&D, while vital to an innovative response and future health, is not sufficient by itself.
From an army of tech wizards who apply the latest cutting-edge advantages in big data, cloud, mobile, social and so forth? Ah, that must be it! Think again. A technology advantage doesn’t last as long as it once did–consider weeks and months, not years and decades.
A healthy innovative response comes from a deeper place within your company. But it begins somewhere, and that somewhere is what I call the “Soft Edge.”
–Trust. This may seem like a fuzzy concept in terms of ROI. But without trust you’ll never create always-on innovation. Employees who lack trust will never share their best ideas. Without trust customers will drop you at the first chance and shareholders will sell or sue. Here’s another thing to consider: Pollsters report that trust is in tatters everywhere in the economy: in the private, public and nonprofit sectors. Trust, therefore, is more valuable than ever.
–Smarts. Silicon Valley and Wall Street swoon at the sight of geeks who score 800 on their math SATs. But these are algorithmic businesses that require having a few stars with water-boiling IQs. For entire organizations smarts come from a different place than IQ. They come from grit, determination, empathy and purpose.
–Teams. The best teams are–and always have been–small, made up of 2 to 12 people who complement one another’s skills. The 4 Beatles. The 12 disciples. Team Alpha in the U.S. Army’s Special Forces. Amazon’s 2-pizza rule. The real genius of Steve Jobs wasn’t his own brilliance: It was the way he sought out his perfect complements, from Steve Wozniak to Tim Cook.
–Taste. It’s the word Steve Jobs used when he described Apple’s unique but universal aesthetic appeal. The chief designer of Specialized Bicycles, Robert Egger, calls it “the elusive sweet spot between data truth and human truth.” If you don’t want to sell at the commodity level–who does?–you need taste. Hint: Taste doesn’t come from market surveys and predictive analytics.
–Story. Durably great companies tell an enduringly appealing story. What hasn’t changed: The best stories are of flawed people who meet huge challenges. (Don’t hide all your flaws!) What has changed: Customers can talk back on social media. What to do? Make customers part of your hero’s journey.