Innovation is the art of competing with oneself. Therefore, it is difficult. Very difficult. Innovation is often perceived as a threat to existing jobs, and change often creates uncertainty.
The bulb was not invented by the candle maker and the post did not invent the e-mail. As a leader, you are responsible for the results next month, and then it becomes difficult to prioritize time to work on developing the services and products you will be living on in three years.
We are all good strategists afterward. The question is what to do when standing in the middle of the batter, under pressure and running a large modern company. Many mature organizations are struggling to develop the new services customers want, often because they are worried about cannibalizing their own core business.
A dramatic, but relevant advice, is to stop selling what you sell today
Ask yourself, “What are we going to make money in the future for?” you work with today. Absolutely no industries avoid this. What part of the store will it be? And more importantly: What part of your business should you invest in yourself wholeheartedly and, not least, innovate?
New players are stepping into your industry. Because they can.
The changes we see now encompass everything. The companies mentioned above are not alone in moving into new industries, and they simply do it because they can. When Apple has over a billion devices on the market, while sitting on the world’s largest credit card database through iTunes, it is perfectly natural for them to develop a payment service. And the change is fast. It’s been almost ten years since Facebook was a startup company.
Back then, Microsoft was the only tech company on the list of the world’s six most valuable companies. Today, only one company is not a technology company on the same list.
Change is not to throw digital dust at existing processes
The problem with many digital strategies is that it is usually about streamlining an existing business model with new technology. One can quickly see that something has been done right, because the margins are getting better; but are there adjustments needed to meet the future? Is it enough?
Rather understand how society and the customer’s world change and act on it. Then it is actually possible that the entire business model needs to be adjusted or reconfigured.
The art of working with a new version of oneself in parallel. When the “dotcom” bubble burst, Schibsted continued to invest despite not having a clear idea of how to make money online. They even let the new services compete with existing services. Free online advertising cannibalized paper magazines. When Netflix competed with itself in 2011 with a changed focus from DVD to streaming, the share price fell by 80 percent. Very few board members and investors accept so much blow. Today, progress is even faster and the demand for managers and boards has not diminished
Established players can grow new initiatives while ensuring future competitive advantages. The challenge with the new initiatives is often that revenues are not very high. But the challenges of being late can quickly become greater.
Where to start?
Change and innovation are nothing new. Society has always innovated, and this will continue. At a fast pace. It is not true that strategic resources no longer matter, but without connection to innovation opportunities it can be done quickly.
As a consulting company, we see many ways to adapt to the future. Not just one road leads to Rome, on the contrary. But there is one thing that is common to those who succeed – they want it. They have made a conscious choice – the cost of innovation is less than doing nothing at all. With this, they are already well into the future.