You say innovation is a critical driver of growth. Isn’t all growth done by innovation or do you mean folks stick to tried and true methods for growth?
Most businesses are designed to make profits alone. In our more than 25 years of experience, senior executives seem to pay more attention to the bottom line (profits) and [return on investment] metrics then to top-line growth. Top-line (sales/revenue) growth is much harder to achieve then the bottom line. Most incentives and compensation plans are primarily tied to the bottom line and stock value. I believe this is the primary cause of much of our financial system failure. Motivation to grow the top-line with innovation rarely exists in the business ecology. Innovation, by definition, requires allocation for ‘mindful failure’ (planned projects for purpose of trial, error, and learning), experimentation, and courage to withstand financial performance pressures. When there is no incentive to grow by innovation, only those real leaders with highest moral integrity are willing to do it. Here lies the irony of our current economical situation.
You recently spoke in Stamford and addressed this question: What is the game of innovation? Is innovation a game?
It is a game because it requires knowledge and skills to compete and win. Innovation is a game that every business needs to play to avoid becoming useless or even extinct. From my perspective as an innovation consultant, I believe that every business must figure out a way to meet every challenge directly or indirectly, with a focus on winning. This means, businesses must learn to experiment, fail, learn from failure, and try something else – until they develop new business acumen skills to sustain and grow.
The rules of the innovation game have also changed – primarily due to two “major” forces: the information revolution and globalization. There is plenty of evidence that shows how these two major trends are shifting consumer buying patterns, local and regional economies, access to education, environmental issues, and pace of life for every human being. This has created more urgent need to invent new ways of doing business – faster than ever before. Average life span of a company is shortening and more businesses are failing faster due to these two major trends.
Our latest research shows that the most critical new competencies that must be developed and managed in your company culture will be: discovery, creativity, influence, implementation, and mindful action. These skills cannot be outsourced and will play more important role when creating and keeping customers for life.
Also, in Stamford, you spoke about the associated myths of innovation.
Among the myths about innovation are that most people think of innovation as an invention or breakthrough products like the iPhone, hybrid cars, green computers, GPS in cars, etc. Another myth is thinking innovation is only for large companies. Other myths associated with innovation include the idea that innovation is too risky, eccentric, and time consuming to achieve. Some think innovation is only for R&D areas, or for high-tech companies and consumer product industries only. Some believe that innovation is too costly and it takes too long to identify areas in need of innovation and implement solutions.
All of these ideas and many more are all unfounded. The key is to understand it, define it for their respective business, and point all innovation efforts towards one of three value-generation business outcomes – to grow revenue, to grow profits, or to grow market reputation.
What are some critical trends individuals and organizations need to know for weathering the economical storm and beyond?
There are several trends. For instance, the future of jobs does not look good for traditional jobs or regular activities performed in exchange for payment, including computer programmer, bank teller, customer phone representative, nurse, certain lawyers, doctors. Those jobs, according to research we have conducted, will be either enhanced or eliminated within next five to 10 years due to two major trends: Information Automation and Globalization.
Another trend is that most businesses today are ‘wired’ to create profits not create new jobs. This is a critical point that is much forgotten and it means businesses will do whatever is necessary to make first a profit. They will automate every job task and overlook the passion behind the job – the human element.
In our applied research, we have discovered that for most organizations considering automation over people, the answer is the same. In order to survive in business, organizations must rethink how to attract, retain, and grow talent pools with skills that cannot be automated – discovery, creativity, influence, resilience, implementation, and mindful action. These are some examples of competencies, which we believe will be in greater demand in the future. At DeSai, we call these the new ‘Hyper Skills’ needed in every future job.
To compete effectively, businesses will have to focus on the importance of the quality and readiness of their talent. Finally, I believe millions of new jobs will be created, not by organizations, but by creative and innovative people themselves. Those who can figure out how to re-invent their own jobs to keep them from being ‘automated or outsourced’ will greatly benefit. The period when employers only designed new job positions are about to go, with more opportunities for those who can create their own job roles and activities to help their organizations.
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