By Ted Santos and
Deborah Brown
Is innovation the result of long arduous trials and
errors? Or is it a practice, which
can be divided into parts and learned?
Does your company know how to effectively position its innovations and
differentiation in the marketplace in order to drive sales and increase market
share?
Rocking the Boat
Good managers solve problems. However, great leaders create
problems and then empower others in their organization to solve them. Creating worthy problems leads directly to innovation.
Yet, deliberately creating problems is counterintuitive.
We’re wired to avoid problems, even before we try to solve them. Culturally
we’re trained to get rid of problems.
Businesses are structured to reward managers for their problem-solving
skills. At the same time, the keys
to the executive suite are not available to managers who only solve problems.
Does your organization have structures in place to reward people who create problems?
What could happen when you don’t have those structures?
More than a century ago, Henry Ford built an innovative
company to solve a problem he created: make it possible for every American
household to own an affordable automobile. He solved the problem by creating
the assembly line. The people of Ford Motor Company changed the world. Except,
the company didn’t look ahead, didn’t pose new problems, didn’t continue
innovating. When GM introduced style and color in its cars, Ford lost market
share to this new innovator.
In 1979, Sony brilliantly created the personal audio market
with the Walkman. The company
created a problem: how to develop a device that will allow individuals to
privately listen to music anywhere, anytime. Today, however, Apple dominates
the digital personal audio market with 78 percent market share in the U.S.
Signs that Your
Company is Lacking an Innovative Culture
How can you tell if your company is lacking an innovative
culture?
- Your CEO spends more than 10% of his/her time solving problems.
- Your company is content with the status quo. Being content leaves you vulnerable to competitors who can disrupt your business model. Without risk, innovation becomes happenstance.
- Your
company’s top line is growing while your bottom line is shrinking. Your products or services have
become a commodity. There is
nothing to differentiate you from your competitors. This is an ideal time
to create a problem for your organization.
- Employees are afraid of failure. A learning and innovative culture embraces failure; a project that fails can still be valuable to the company’s larger goals. Employees should be encouraged to create problems themselves.
- Management is disconnected from the employees in terms of innovative ideas that move the company forward. Oftentimes, companies make the mistake of going it alone – relying on management and/or research and development in a silo to come up with innovative and creative ideas as opposed to engaging the brainpower of employees throughout the organization.
- Your company is successful.
How to Create an
Innovative Culture
Creating an innovative culture incorporates three very
important approaches:
- Lay out the problem clearly, with a definite objective.
- Make sure people have the tools they need to solve the problem you or your CEO created.
- Get out of the employees’ way as they solve it. Empower them to innovate.
Jack Welch, when taking over as General Electric’s CEO,
declared that every division must rank No. 1 or No. 2 in its industry – or be
sold. Welch dared to imagine a future dramatically different from the past.
This was no “cut costs by 3 percent” memo; this was a new vision, which could
only be fulfilled by committed people with a new perspective on their business
units and the possibilities.
The problem Welch created was the catalyst for a quantum
leap, which disrupted complacency.
Nevertheless, creating problems is counterintuitive. What must happen to ensure buy-in for a
vision that appears to be a problem?
It’s imperative that organizations design a culture that embraces a new
mindset toward problems. In
addition, Welch’s problem gave people in the corporation a greater
purpose. He didn’t demand that
people work harder and do better.
He gave them an objective, which didn’t require him to micro
manage. Individuals were
responsible for creating goals for which they could claim ownership.
When a leader declares a future that doesn’t exist, it’s
inherently a problem. It breaks from the past; it may demand new skills and competencies. When the leader is standing for something bigger than the problem, however, that stand becomes the value system of the organization. The value system inspires and motivates people to
innovate. When people are
empowered to be innovative, their commitment increases; they have a chance to
take new actions and be proud of their accomplishments. Indeed, when people are allowed to
create problems themselves, cost efficiencies, new products, and new services
are created.
When problems are viewed from another perspective, it
becomes fairly obvious that possess opportunities. New opportunities require innovation. Innovation is a solution looking for a
problem to solve. What problems
does your organization solve?
Also, problems can give your organization a new future. It can bring purpose and values. It can be the catalyst for
innovation. And it can differentiate
you. What is your problem creation strategy?
Strategically
Positioning Your Company
Once you have created a truly innovative culture it’s
important that you, as a leader, facilitate a communication structure and
strategically position your company as an innovator in the marketplace. You’ve heard that old saying, “If a
tree falls in the forest and there’s no one to hear it, did it make a
sound?” The same is true for
companies and their marketing or lack of marketing initiatives. If your company is highly innovative,
but prospects and customers don’t know it, do your innovations exist?
It’s critical that companies understand how to position or
reposition themselves in their industry.
This involves developing a positioning statement that clearly
differentiates your company from competitors, underscores your company’s
strengths and explains how your company and its products/services provide a
solution to a problem. An
effective positioning statement can also provide your company with a thought
leadership platform.
What’s your elevator speech? In other words, if you have 15 seconds to tell an important
prospect what your company does and how it differentiates itself, can you? If not, you need a unique positioning
statement that is articulated by everyone in the company – from the CEO to the
receptionist.
A positioning statement is not a tag line; it’s a sentence
or two that establishes your leadership position in your industry. It also provides direction for the
company and keeps everyone focused toward a common goal. And, it’s important that it rings true
with all constituents.
Risk and Reward
You can’t have reward without risk And, nothing holds
greater risks – and rewards – as creating problems in order to create new
products and markets and become a recognized leader in your field.
Being complacent and accepting the status quo is a greater
risk than taking a risk.
Those who are great leaders create both problems and the innovative culture to develop solutions to those challenges. And…through effective
positioning and a smart, strategic communications plan, they make sure their
industry, shareholders, customers and prospects hear it loud and clear.
What do you think? I’m open to ideas. Or if you want to
write me about a specific topic, let me know.
Ted Santos is the Chairman of the Board of Veteran CEOs; a
NY based firm that specializes in high level services to middle market
companies. Ted can be reached at (tsantos@turnaroundip.com or 888
471-3660).
Deborah Brown is a partner and senior director at Peppercom,
a strategic communications firm in New York, San Francisco, Chicago and London
that specializes in positioning and repositioning corporations. Peppercom is
the recipient of “Small Agency of the Year – 2006” from PR Week and “Innovative
Agency of the Year – 2006” from the Holmes Report. Deborah can be reached at dbrown@peppercom.com or
212.931.6113.
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