Innovation – Let’s Give It a Chance!

People know that innovation is one of the keys to our future and it was great to come across an excellent article published recently in a main stream media blog. The article on Innovation by Kristen Le Mesurier in the Sydney Morning Herald Website is well worth reading as is one in the New Yorker: Hanging Tough that Kristen refers to.

Some companies have jumped in far too quickly and started laying people off too soon before they had really analysed the full costs of doing that. Usually, companies factor the cost of an employee as several times that persons salary package. So losing just one good person is expensive, but actually laying lots of people off that you may later need is extremely expensive! It can be fatal to long term success whilst providing a short term solution only.

On one hand if companies lay people off too soon they are hampering the chance for the business to grow again when the times improve and are spending a lot of money in redundancy payouts to boot! But on the other hand if they keep on employing too many staff at a loss for too long then they are putting the whole financial foundations of their business in peril. They are caught between the proverbial "rock and a hard place".

To my mind though, real Innovation is much harder than the easier approach of cost cutting. Yet innovation can yield fantastic results but takes brave managers with foresight and real determination to drive through. When you have a Company Boardroom breathing down your neck it can be very hard to say. “Hey, I have a great idea, let’s try out a complete new product or service line”. Of course, it is easier and more defendable to the shareholders to just cut costs. The connection between innovation and the bottom line can seem a long way off. It is risky, maybe innovation will work, maybe it won’t. And usually our senior managers and executives, as good as they are, are not rewarded for their innovation. Hence, the most common approach is reluctantly for businesses to cut costs. Like a disease it is catching. If your competitors do it, you feel you should and so on it goes.

But history shows Innovation is key, and many books attest to that.
Books such as:

• “Good to Great” and “Built to Last” by Jim Collins
• “The Medici Effect” by Frans Johansen
• "Think Better” by Tim Hurson and
• “Blue Ocean Strategy” by W. Chan Kim and Renee Mauborgne

are fantastic reads that should inspire any company leader to try something different.

I understand the difficulties, but just doing what every other company in the crowd does won’t work in the long term either.

Innovation – Let’s give it a chance!

Owen


P.S. Watch the short presentation by the legendary Tom Peters.



And two longer presentations from Harvard Business Publishing