Innovation or innovators? 1

David Harrison, Managing Partner of True Potential LLP, The Open University MBA alumnus

Innovation or innovators

Edited transcript of Business Perspectives Video: Innovation or innovators?

“Most of the organisations I see, they train everybody”

“I have observed first hand that it’s about selection. I’m not necessarily a nature versus nurture addict if you like, but if I was, it would be nature. But if you look at any elite organisation in the world, it will probably be down to selection. So if you look at British Special Forces, as an example away from financial services, they don’t train people until they’ve selected them, on a course of selection criteria which rules out just about every human being possible.  The ones that get through, they train them.”

“So what people do is set criteria, some sort of hurdle that most people can’t get over, “therefore they are weak, and let’s train that weakness”. And I don’t. I think I ignore weakness, I work with strengths.  One strength can be innovation that you have within individuals in an organisation, but there will be other individuals who don’t have that as a strength. People then tend to get angry and say “everyone is creative”, “are you saying I’m boring and dull or whatever?”. And if you are in finance, you may say “I wanted to be in finance, boring and dull, I didn’t want to make a mistake and cost everybody millions of pounds”. So there has to be those people, and those people, I believe, are happy doing that job, because they are naturally endowed with the ability to be careful, to be numerate, to do the things which other people may find boring. They probably think that all creative people are glib, they are chaotic, they create a real mess for these people to tidy up.  And I think it’s just recognising in an organisation that there are different people. And I want to separate that form of creativity, that form of real innovation, which may find you in a different market, with a different product and so on and so forth, from what I call the ordinary everyday creativity, which most people have, which can also lead by the way to big leaps, such as improving a process we’ve already got.

So if you look at the organisation we have got, we have got lots of people, they are mostly partners, and I think that helps creativity because essentially what they are doing is,  if they bring something to us, then it is to their advantage as well. The more they do of that, the more shares they are likely to have, the more important they are going to be in terms of value for the organisation.”

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.