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The Innovation Imperative

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In recent centuries, innovation has become a department, within which people considered innovative are located. The very existence of an innovation department / centre, by definition, implies that innovative behaviour has been corralled and that beyond the department expect to find predictability, sameness, tradition and process.

This is the very model the industrial era factory is built upon. Find something the market is willing to pay for and build it as efficiently as possible in order to maximise the margin. Six Sigma, Lean, Business Process (re)Engineering, Kaizen and Quality Circles all attest to that.

In the industrial era, society was to some extent architected to provide the predictability needed to make this model work. Investors knew that this architected (i.e. synthetic) certainty significantly reduced their investment risk. It was very likely that the demand for the goods produced by the factory would be of sufficient duration to justify the associated investment.

This ‘synthetic certainty’ that characterises the industrial era meant that once a business had stumbled upon a market-pleasing product or service, it could exploit its monopoly, dominance or competitive advantage for years. Thus the emphasis was more on production than innovation.

However, the world has moved on. In many respects, Covid-19 is the unofficial closing ceremony for the industrial era. Synthetic certainty has given way to increased volatility and uncertainty. Thus any form of market advantage is now transient at best. Consequently, a shift is required from process orientation to one with innovation at its centre.

The factory model, given its abhorrence of failure, is not well suited to becoming innovation oriented. And even if the leadership could overcome that conceptual hurdle, they would face the issue of what to do with a workforce that was recruited for its compliance, ability to adhere to the process manual and most crucially was missing the ‘innovation gene’.

In my experience, very few business leaders realise what is needed (innovation) and even fewer realise the talent management implications. The typical response is to take the view that new technologies will somehow future proof the organisation. Of course, faster, smarter and cheaper is good. But a faster, smarter, cheaper Titanic is still a Titanic. Even one optimised to detect icebergs is no match for air travel. So this so-called Industry 4.0 approach is not going to cut it.

In my work with organisational leaders, I encourage them to think less about building a turbo-charged factory and more about creating a super-resilient organisation. By that I mean an organisation that behaves like a living organism. Living organisms are situationally aware and opportunistic. They move towards opportunity and away from threats, generally with energy conservation in mind. Thus they need to be able to sense their environment (emotional intelligence), decide what action to take (mental intelligence) and to then act (physical intelligence).

A super-resilient organisation lives in the present and has the cognitive capacity to innovate on demand. A large part of its ability to stay in play is to not be reliant on one business model. Super-resilience means being in the business of continually creating new business models and so avoiding a single point of catastrophic failure. Such organisations need to have an innovation engine (or perhaps metabolism?) at their core. This is fuelled by the cognitive capacity of the workforce. Ultimately super-resilient organisations are in the business of cognitive management.

Why super-resilient and not just resilient? Well, it’s a characteristic of living organisms that the more adversity / forces they encounter, the stronger they become. The term antifragility has a similar meaning.

So whilst resilient organisations eventually recover from harsh conditions, super-resilient organisation simply become stronger. Many leaders today are of the mindset that Covid-19 was a ‘one off’ and that soon we will enter some form of post-Covid, new normal or even next normal. The reality is that disruption will be the backdrop to our lives going forward and so abnormal is what lies ahead. There are only so many traumas a resilient organisation can endure, whereas super-resilient organisation are fuelled by innovation and thrive on disruption.

Leaders need to carefully consider their next step as we enter this era of ever-increasing disruption.


Inspire

This insight was first featured in our leadership insights magazine Inspire, to view past issues click here.

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