The speed of any industry in this era demands constant innovation to maintain success. Today the life cycle of technology is measured in months instead of years. Traditionally, innovation was often relegated to an R & D function with little funding or exposure from the main business. The need for innovation today has forced companies to move innovation to the forefront, building it into their communications and mission statements. However, these declarations of innovation often fall short due to a lack of commitment by the organization.
Having worked in the field of industrial technology for 20 years, I have spent a career helping customers develop innovative ideas. A commitment to innovation can transform dying companies into industry leaders; likewise, I’ve seen industry leaders ruined by a failure to innovate. The three steps below define the level of commitment required for a company to successfully lead through innovation.
1. As a leader you must lead by example and embrace innovation.
A company pledge to innovate holds little value if the leaders of that company put more value on short terms gains than long term success. Incentive plans and performance reviews must hold equal balance to financial performance and innovation. Leaders of the company must invest their time, their most valuable asset, in developing, trumpeting and fostering innovation. Steve Jobs did not put himself in front of analysts to discuss the corporate profits and value of the stock, but he personally introduced each new product innovation. This created an image of innovation around the Apple product line, but it also led to financial performance that outpaced all of their competitors.
2. A leader must be willing to devote the resource necessary to allow innovations to succeed.
Innovation is an expensive investment that does not show a return in the short term. Innovation must be funded properly in order to succeed. A company must be able to bring in revenue while the innovation is being developed. The example of Blackberry shows that revenue must be defended while innovation grows or the company and the innovation will fail. Blackberry was not able to maintain sales while it worked to develop innovations. The company is collapsing under its own weight, despite innovations being developed that would have returned it to the forefront of the industry.
3. A leader must innovate in what a company does well today.
Companies often have ideas for innovation that run far afield from their specialty, but the most successful innovations come from companies expanding their success in the things they do well every day. This innovation can be in the product sold, but it can also be in the way it is sold. Amazon had changed the book selling market through online retail. When Amazon innovated, they didn’t become a better bookseller, they changed more markets. Their entry into the industrial supply market is disrupting the industry and closing competitors. What Amazon did right every day was not book-selling; it was online retail and logistics. By innovating in those aspects they are able to penetrate various markets quickly and effectively.
The innovation that can be achieved through these steps is more than the development of a new product or service. Innovation is the lifeblood of a company and the foundation of its mission. Employees do not dedicate themselves for what a company is they dedicate themselves to what a company is going to be. A company can flourish through innovation, but leaders have to embrace it, fund it, and find it in their everyday expertise.
Leadership Lecture Series Event: Creating a Culture of Innovation
Friday, April 4 | 1 pm to 4:30 pm | $115/pp
Matt Schatteman is the General Sales Manager of Catching Fluidpower, a Kaman Company that distributes an industrial component for the Chicagoland region, and a student in the Ph.D./D.B.A. Program in Values-Driven Leadership.