Bounded Innovation – the limitations of organisational reality 6

Guest blogger:

Fiona Beukes Fiona Beukes, The Open University MBA, UK Marketing specialist, BNY Mellon
 

Innovation in some respects is like the Holy Grail of business – How do you do it: disruptive or continuous? How do you foster it in your organisation: Incentives? Creative downtime? Hire the right talent? Although these are obviously worthy avenues to explore, they do take time to implement.

man with bulb head

Is your organisation agile enough to foster innovation?

I think many organisations are hampered by their internal environment which prevents a dynamic, agile response to market change. There is definitely a tension, in my view, between Grant’s internal resource perspective and Porter’s economic view of the workings of the external business environment.

From a practical perspective, I also think many companies find it hard to innovate through disruptive change. In my view, the larger and larger an organisation becomes the more bounded I feel it is to its BAU (Business as Usual) and the day-to-day constraints that just “getting things done” place on its internal environment.

The leaner, younger, more nimble upstart is likely to steal a larger company’s thunder and swiftly re-engineer the external environment. Think of Apple launching the iPod – a lower quality sound compared to compact discs so Sony engineers believed at the time – a product that rapidly caught the attention of a mass market interested in synching their PC to a portable, lighter device. In the end, a good quality product (CDs) lost out to unperceived customers’ needs and wants (iPods).

I think it is this disconnection from the customer which fosters continuous improvement in an organisation rather than disruptive market change. As a product or service exists already and a level of stakeholder engagement is in play – internally and externally – it becomes safer to adapt and improve a product or service rather than launch new ones. Why ruin a good thing?

It is also seems safer to improve the operational side of an organisation by being leaner and more cost-effective rather than radically altering the product or service and risk a customer backlash: something Coca-Cola experienced when they launched new coke in the 1980s. Why risk upsetting the apple cart, and more importantly, an organisation’s shareholders by changing the status quo?

There are certainly many barriers to innovation in organisations – people, culture, shareholders to name a few – and varying ways in which to be innovative. In my mind, how an organisation chooses to innovate is contingent on a range of external and internal factors. And also its strategic, longer-term vision of what the future holds.

To read more of Fiona’s articles, visit her blog.