“We’re going to create a new strategy, which is going to deliver game changing results for our organization! It’s based on innovation and it should be easy to do as we can just follow the same strategy pathway that we mapped out when we tried all of those other strategies over the years!”
Right? No, wrong! Well, partially wrong in fact. Yes, a culture of innovation can help to deliver differentiated success; but no, following the same strategy groove, which you’ve worn down over the years, is not going to get you there. In fact, no matter what the vision, following the same pathway as before is not going to lead to success.
Quite simply, traditional approaches to growth don’t work in the contemporary world, because the world has moved on. Competitive advantage used to be based on product or service, features and benefits, but these are now homogenous and can be copied instantly. This means that ‘length of differentiation’ is now measured in weeks or even days.
And then there is the problem of the competition itself. Traditionally rival organisations worked within a virtually closed sphere. You knew whom they were, you could list them out and a quick bit of networking in the right places could keep you on top of the game. Now disruption can come from anywhere. PwC’s 18th Global CEO survey revealed that 53% of CEOs think that cross-sector competition is on the rise and 54% of CEOs have either entered a new sector or considered it within the past three years. And those new disruptors are not necessarily the global players or even the mid-sized players. Technology has now reached a level at which small entrepreneurial organisation can deliver at the same scale as bigger, more established, incumbents. The ability to disrupt is no longer the preserve of big companies.
Add in the accelerated pace of change and the fact that regulators are actively encouraging new entrants to markets and the result is that for some organisations their competitor or disruptor may not even exist yet. They may not be ‘in the room’. However, when they do start up, without the baggage of past processes they will be able to grow and start taking market share within a matter of weeks; so by the time they are on the radar it will be too late.
All of this adds up to one simple fact; the traditional approach to strategy is dead. Trying to gain a bigger share of an existing market is in essence continuing to play at the old game. And that is significant, not simply because it requires organisations to embrace new methodologies but also because it highlights one reason why the ‘big’ strategy consultancies often struggle to help organisations to drive innovation. When skills have been honed around being analytical not creative, when statistics rather than entrepreneurship drive change then the focus and the approach will not drive the innovation-led change required to win at the new game.
The answer is not to open up to random, unfocused or ad-hoc methodologies but to direct the focus towards creating strategic innovation. What does that mean? Traditionally, programs, which are designed to deliver improvements, are generally focused around structure i.e. increasing efficiency, streamlining processes or just generally doing the same as before only a little better. Strategic innovation is about moving away from the structural (what have we got today) to the contextual (what is out there and what problems can we solve for a better tomorrow). To put it another way strategic innovation moves the organisation from exploiting what it has towards exploring what it can do.
Is this a totally new concept and therefore something, which requires a deep breath before plunging into? Well, no not really. Most organisations are already skirting around the edges of innovation with lean or continuous improvement programmes. However, those who have truly embraced the future are playing at the new game which moves tinkering around the edges of change into business model innovation and customer experience innovation. They are the ones, which have recognised that the traditional reliance on data and insight is no longer sufficient and which are actively seeking out a deeper level of understanding. They are the ones, which have not stopped asking for ideas but have changed the emphasis towards identifying problems and then looking for ways to solve them.
Forget the past. Stop asking what can we do with what we have and start asking what are we capable of and what problems can we solve. Only then will you be able to establish a future-focused innovation strategy, which defines where, and how it’s going to drive your organization forward.
So the challenge is out there. If you are a CEO or a senior leader and innovation is a current strategic challenge then what are you going to do to change ambition into a strong vision, strategy and reality?
If you are sincere about creating the future then get in touch to discuss how The Future Shapers can help you move forward by enabling your senior team to become innovation leaders and helping embed a game-changing innovation culture.