Making innovation imperative
Over the past few weeks I have encountered the topic of innovation at seemingly every juncture:
At a symposium on facilitating group innovation.
In a business school strategy group discussion of writings on the process of innovation and how to foster it in organizations.
Through the work of a non-profit that provides STEM (science, technology, engineering and math) education to kids to encourage invention.
From an insightful trade association executive who spoke about the need for associations to launch innovation processes to assure their sustainability.
From this immersion in innovation thinking, a big take away is that innovation starts with a person. It starts from a person being creative, open, curious and willing to entertain change.
Newton, as the story goes, got thinking after being beaned by the apple and came up with a concept that revolutionized science. Ford envisioned a car for everyone. John Bardeen won double header Nobel prizes in physics for the transistor and superconductivity; his curiosity led to modern electronic devices and magnetic resonance imaging. Howard Schultz foresaw Italian coffee as an American rage.
The challenge for all of us concerned about organizations acting strategically is that we have to find the space in our organizations for these creative people to function and then for their ideas to take root and grow to the point where the commercial opportunity is apparent and acted on.
Some organizations are structured around continuing innovation and more or less are effective at producing it: "Big Pharma," 3M and Apple immediately come to mind. Others are more apt to "buy it," such as Cisco. Many innovate less routinely and find it difficult to move away from their embedded products or services.
If innovation is indeed imperative for the longer term existence of an organization, then isn't making space for it, nurturing it and in fact making it an organizational imperative a critical charge for organizational leaders? Looking beyond the daily transactions and quarterly results is where strategic thinking is called for. This kind of perspective will show that what is provided and what the market wants and needs today will change and the organization needs to be working to stay ahead of this change.
It's the 100th anniversary of IBM, a company that at times in its long life has had to innovate in fundamental ways to keep prospering and, indeed, to not fail. It takes an extremely gutsy leader such as Thomas Watson Jr. to do what he did at IBM in the early 1960s: He announce that the entire uncoordinated product line of computers, the company's lifeblood, was being retired immediately and that a comprehensive, scalable new line, System 360, would be created on a strict time line. He could see that without urgent product innovation others would leapfrog IBM. The company took a huge gamble costing about $5 billion (more than $30 billion in today's dollars), at the time only second in size to NASA's project to reach the moon. It hired 60,000 new employees.
Watson's mandated innovation worked. IBM’s share of the computer market nearly tripled to well over 75% and company revenue jumped from $3.2 billion the year System 360 was introduced to $7.5 billion in 1970.
Thomas Watson Jr's bet on System 360 is perhaps the ultimate in an established organization giving space to innovation. But there is a big lesson to learn from introducing the organizational equivalent of the panic that would arise from driving at high speed toward the cliff edge. It galvanizes focused action, that's for sure!
Perhaps in our bureaucratic, slow-to-move organizations, introducing this kind of sheer terror moment is needed to get off the dime.
