Innovation as a Weapon in Global Competition – Part 1

In this three-part blog series, innovation guru Stephen Shapiro  discusses innovation in the global landscape of today’s economic environment.

To say the global economic environment is undergoing the most rapid change in the history of business is to state the obvious. Unless you have been living under a rock for the past year, you know all about the market blow following the September 11 terrorist attacks, the dot-bomb phenomenon and the collapse of Enron. To make matters worse, many American companies are increasingly facing resistance—internal and external—as they try to expand globally.

These events, combined with an already declining global economy, have left corporate executives on edge. Yes, it’s bad news and it’s depressing. The good news? Everyone’s in the same boat.

But now as before, the fundamentals stand: If you create a business that can adapt quickly and flexibly to the changing economic and cultural landscape, you may have the silver bullet you’re looking for.

A key to achieving this kind of quick response is learning how to inject innovation into decision-making at all levels of the organization. It won’t happen by decree from the CEO, and I’m afraid there is no shortcut. Real innovation requires broad cultural change based on values, guidelines, and outcome-based measurement systems that give flexibility to all employees while mitigating risk for the business as a whole. Done properly, a company can stay ahead of the change curve and beat the competition while also easing its move into new markets.

If you aim to achieve and sustain a leadership position in a global marketplace that never sleeps, your company must be a hothouse of creative thinking, flexibility and agility—twenty-four hours a day, seven days a week.

Continuous innovation
Innovation has traditionally been thought of as something separate and discrete, brought into the organization from outside, from the laboratory. Take your most innovative, creative people and lock them in a room while they develop a new process. Then tell them to implement the change company-wide.

But is this really the way a company should be run? A study carried out at Eckerd College in Florida challenges the traditional models.

Managers who came to the Eckerd leadership course were broken up into teams and given a problem to solve, “The Hollow Square”. Before being allocated to their teams, the managers were assessed to determine whether they were “innovators” or “adapters”. In general, innovators tend to “do things differently” and are prepared to break with rules or ignore past traditions. Adapters, on the other hand, are focused on “doing things better”, but they tend to work within the rules and accept the status quo.

For this exercise they were divided into teams, of which three are of particular interest. Each team was comprised of two groups. One of the groups was designated as “planners”, and its task was to work out a solution to the problem. The second group consisted of “implementers”, charged with making it work. The planners told this group what to do in order to form a hollow square with the tools that had been made available to them.  In the first team, the group of planners was made up of the “innovators” and the implementers group was made up of “adapters”. In the second team, they were all mixed up together. The planning group had both innovators and  adapters, and so did the group of implementers. In the third team, however, the groups were turned upside down.  The planning group contained only “adapters” and the implementing group contained only “innovators”.  Although most would dismiss the structure of the first team as unworkable, this is how most companies implement change. Team structure two, the cross-functional approach, is usually assumed to be the best alternative. But in reality, the third option is the one that turns out to be most effective—the one where the “adapters” do the design and the “innovators” implement it. The “adapters” are able to come up with a design very quickly, albeit an imperfect one. And the creative types are then able to take that design and build something from it, correcting and improving as they go along. Whenever a problem arises they are able to solve it there and then without checking back with someone else.

Can everyone be innovative?
Continually competitive businesses will be built not around a lot of heads and hands, but around a lot of hearts, around motivation, dedication, and commitment to creative thinking. Successful innovation is continuous, and that very continuity enables companies to keep pace. Executives recognize that their company loses ground when the pace of change outside the company is greater than the pace of change within.  A popular myth is that some people are born creative, and some are not. There is, in this view of the world, a creative type of personality—Michelangelo, Mozart or Tolstoy, for example—and then there are the rest of us. But this is totally wrong. It’s all a matter of degree. We all have the potential to be innovative—perhaps not quite as much as Mozart, but innovative nonetheless.

This premise has been tested out many times over the years. For example, George Land and Beth Jarman, gave 1,600 five-year olds a creativity test used by NASA to select innovative engineers and scientists, and 98 percent  of the children scored in the “highly creative” range. These same children were re-tested five years later and only 30  percent of the 10 year-olds were still rated “highly creative”. By the age of 15, just 12 percent of them were ranked in this category, while a mere 2 percent of 200,000 adults over the age 25 who had taken the same tests were  still on this level. So, it seems, creativity is not learned, but rather unlearned.  And yet the business world has traditionally favored analytical thinking over the capacity to innovate and has seen to it that business schools produce highly trained young men and women to think along strict parameters. But times have changed, and now the mission has to change—to help people unlearn their uncreative habits. The ability to innovate is much more pervasive and ubiquitous than most of us imagine.  A word about definitions. Innovation is not the same as invention. Invention is something to be pursued in a carefully controlled laboratory atmosphere. Invention is the process of discovering things that have never been discovered before. Innovation is different. In the business world, innovation is the discovery of new ways of creating value. Not everyone can be an inventor, but everyone can be innovative.

Check back Monday and read Shapiro’s continuation on Innovation as a Weapon in Global Competition with his examples of strategies that have worked and how to create a culture of innovation.

About the author

Stephen Shapiro is the author of 24/7 Innovation: A Blueprint for Surviving and Thriving in an Age of Change and founder of The 24/7 Innovation Group.  He has also collaborated with other thought leaders including Michael Hammer and Peter Keen, and is recognized as one of today’s most influential consultants in the area of process and innovation.