This is the 4th blog in a short series covering my latest thinking on building what I call a ‘Next Generation Organisation’ so if you’d like to read the previous parts see the links below.
01. Innovation and Building a Next Generation Organisation
02. Building a Next Gen Org starts with Intelligence
03. Building a Next Gen Org requires Collaboration
One of the more thought provoking statistics to emerge from the 2014 Budget speech was that “later this year the OBR expects Britain to reach the point when our economy is finally larger than before it collapsed six years ago.” That’s great news for the future but what a six years it has been! Whilst some companies have managed to weather the storm in one fashion or another, many household names have been swept away. Comet, JJB Sports, Woolworths to name but a few; all seemingly rock solid organisations which succumbed to the tsunami of recession and changed shopping patterns which swept across the globe.
Looking at these organisations, and others, if there is one lesson, which we all need to take forward into this new period of growth, it is the need to be adaptable, to increase the focus on agility, to be able to execute change better and get new stuff to market faster. So why in this fast changing world do 68% of UK corporates take just as long to innovate and get new solutions to market now as they did five years ago? People have changed, shopping patterns have changed and will continue to change and businesses, which are not set up to change with them, to keep pace, are businesses which may too late learn the value of adaptability. In a world in which one picture, one thought, one tweet can go viral in a few minutes, the only certainty is that there is no permanence which is maybe why only 18% of executives believe their existing innovation strategy is delivering a competitive advantage!
Actually, that’s not quite true. For whilst there is no permanence, I think organisations can work to protect their future. Through the combination of ‘Intelligence’, ‘Collaboration’ and ‘Adaptability’ organisations can be in the right place to respond to rapidly changing marketplaces, build inspiring innovation cultures, game changing business models, products and services and deliver amazing co-created customer experiences.
For many, innovation is a new priority, but for organisations like Whirlpool, P&G or Nike for example, innovation has been a part of their DNA for many years. AG Lafley at P&G is well known for his appreciated of design and design thinking.
“We want to become the number one consumer design company in the world, so we need to be able to make it part of our strategy. We need to make it part of our innovation process.”
Chairman, President & CEO – P&G
“When I got the job, I knew I wanted the company to be more innovative, more global, and more focused on the customers. But it does take a year or two or three to really put ideas into initiatives and get the team aligned. The big difference is that business leaders have no choices here. Nobody is allowed not to play. Nobody can say, ‘I’m going to sit this one out.’ That’s the way you drive change.”
CEO – General Electric
Take Nike for example. With a worldwide name and some of the biggest sports stars on the planet as brand ambassadors it is easy to think that Nike will be around forever. And yet Nike operates in a marketplace in which fashion and brand identity are market drivers and the fickle finger of market trend could swing away from the company at any time. Nike counters this threat with an awareness of the need for continuous innovation, agility and fast product to market times. Speaking in 2013 Nike CEO, Mark Parker, considered by many as the world’s most creative CEO said “One of my fears is being this big, slow, constipated, bureaucratic company that’s happy with its success” adding “Companies fall apart when their model is so successful that it stifles thinking that challenges it.” So Nike innovates and it responds to trends by incorporating sustainability into its model and by not only keeping an eye on future movements in the marketplace but in playing a leading role in establishing those trends. With ideals including ‘it is our nature to innovate’ and ‘evolve immediately’ the Nike innovation way encompasses every employee.
“One of my fears is being this big, slow, constipated, bureaucratic company that’s happy with its success. Companies fall apart when their model is so successful that it stifles thinking that challenges it.”
CEO – Nike
Mark Parker’s fears are unfortunately all-to-real barriers for many organisations with 59% citing bureaucracy as a main barrier to ideas making it to fruition and 46% of leaders claiming their organisational structure is a barrier to innovation with that figure rising to 87% in the banking industry. This goes some way to explaining why only 28% executives are happy with their companies’ ability to commercialize and launch new products, services and experiences and the consistency of their innovation performance.
However, the perception that low innovation is as a result of a lack of ‘ideas’ is far from the truth. The reality is that ‘lack of ideas’ isn’t even in the top three obstacles to innovation. 78% of executives cite challenges around building business cases and 81% say the real challenge is executing on and implementing the ideas that have been chosen for development.
But what does that mean for the customer? Quite simply, the more innovative and the more the company embraces adaptability, the more the customer benefits. We may not all go as far as Nike, which believes that ‘if you have a body, you are an athlete’ but this focus on providing outstanding products alongside outstanding levels of service and experience is one which all businesses can learn from. In a homogenous world it is the little touches, the attention to detail, the customer care, the responding to market trends and the attention to innovation which results in the exceptional levels of customer service which feed directly into relevance, longevity and enhanced business performance.
In common with other Next Generation Organisations, Nike understands that the world has changed and to survive in the future you have to create the future. For some this will come easily but for others it may require a complete transformation in culture, attitudes and practices in order to increase the ability to react, change direction and get stuff to market faster. On average, UK corporates take just as long to innovate now as they did in 2009. But, the world we operate in has increased in pace so in real terms for most organisations, innovation and getting new stuff to market has actually slowed down! However, there seams to be a small unique band of organisations that do it fast. 3% of UK companies are able to get ideas to market in less than six months and it’s not what they are doing that’s any different, it’s how they are doing it! They are using design thinking and design processes to make things happen faster, to co-create, to test, to prototype, faster and more cost effectively than the other 97%.
The design process is a great tool for organisations to embrace in order to build this capability as it creates a pragmatic, staged framework, giving method to what can too often be overcomplicated and hampered by company structure and red tape.
Every organisation needs to be driving innovation-led growth but few actually do. If you want to be one of the few and a ‘Next Generation Organisation’ and you’ve got a question ask Cris on firstname.lastname@example.org or browse our website for more information.