The Strongest Inhibitor of Innovation is Contentment

How Savvy Business Managers Avoid Being Relegated to the Herd

If you accept the way it is done, because it has always been done that way, then all you will ever be able to do is what has already been done. Form followed seeks to repeat what has been done; while innovation followed seeks to find what could be done. Innovation is the way to lead the herd, not be part of it.

Examine any successful company that has fallen behind or failed. Most often you will discover that failure came, not because they stopped doing what they had been doing, but precisely because they were content to keep doing what they had been doing. In a word, they failed to innovate.

In business innovation is the only way for leaders and companies to respond to the evolution of how things should be done. In nature, all living species must learn to evolve and adopt or become extinct. So too in business, the failure to innovate, to evolve and adapt, is a death knell.

If failure to innovate is seen as the curse of ongoing business success, why, then, don’t all business leaders make innovation a fundamental plank in their business culture? Simple. Many managers claim to understand the importance of innovation, but in reality, they desperately fear it since innovation means to do what has not been done. The truth is, one cannot be innovative without being out there and alone; the extent of the aloneness depends on the extent of the innovation. The more innovative the act, the more completely alone one is.

That’s why most managers find it is easier and certainly safer to do what they have always done or worse,  joining the herd and following what others are doing. Recognizing and embracing innovation is a risk, but not nearly so much as rejecting it. As Will Rogers said, “You’ve got to go out on a limb sometimes because that’s where the fruit is.”

Kodak Offers Valuable Lessons

It has become a cliché now, but Kodak is the classic example of a company that was penalized with a loss of relevance for its failure to successfully innovate. The company was, for decades, the very icon of photographic imagery, the epitome of corporate branding: Kodak was photography. However, when the innovation of digital photos began to take hold, Kodak obstinately clung to its core business of film photography. The result was that Kodak became an afterthought and a follower, not a leader.

The irony is that Kodak was actually one of the first innovators in the development of digital photography and even today the company holds many of the most important patents in the field. Kodak’s failure came not from the inability to innovate, but from a failure to follow through on that creative promise and firmly implement its innovations. As John Maynard Keynes noted, “The difficulty lies not in the new ideas, but in escaping from the old ones.” The management of Kodak was content with what they had done and this mentality prevented them from using the innovations that their own company had developed as a way to do more than they had done. As a result, Kodak ceased to lead the herd and became subsumed by it.

Companies reject innovation for the very reason they should embrace it. Innovation means being different and most managers fear being different. Instead, like a pack of shrill eunuchs, they seek the perceived comfort and security of the “peer group,” rather than embracing the risk and challenge of being out front. They are, in essence, in love with the past and fearful of the future; and with that attitude they forfeit the future to others, because the future belongs to those who get there first.

A More Contemporary Example

Recently, I was witness to just this type of diminutive mind-set regarding innovation. A large investment group – with some investments in insurance – asked me to help them explore how they might play a larger role in the insurance industry. These were well-intended, smart people, but the discussions were frustrating, both for the group and me.

Before making their initial investments in the insurance industry, they completed a thorough and detailed due diligence into how the industry operated and its products. Now that they had jumped in and purchased a couple of insurance companies, they wanted to learn how to increase the growth of the companies and play a larger role in the industry. This is where we ran into problems.

This group was literally looking for me to tell them how their companies could do better by doing more of what the competition was doing. Believe it or not, their idea of innovation was to research the best-selling products of other companies and copy them. It was like speaking to the dead when I suggested they should look for what the other companies are not doing, and do that.

When the idea of developing and offering different and innovative products was brought up, the reaction was traditional. To the tune of “everyone does it this way,” I heard – “That won’t work.” “How do you know it will work?” “Why aren’t other companies doing this?”

This group had made large investments in these companies and they were seeking to mitigate their risk by learning what other companies were doing and doing the same. What this group did not realize was that the biggest risk they were taking was the risk of not being different. One does not lead by following, but by innovating.

And the Moral of the Story is …

There are a myriad excuses – especially in difficult economic times – that can be offered as reasons for a failure to have an innovative mind-set: innovation is long term, it is expensive, its results are uncertain, it takes focus off what is already being done successfully and it may require the cost and complexity of changing existing systems. Exactly!

The fallacy in this thinking is that innovation will come, whether we want it or not. The French were content to hide behind their Maginot Line, thinking they were safe from German invasion. They were safe from the way things had been, but due to innovation, they were vulnerable to the way things had become; and paid a dear price for that mentality. The true discomfiture that comes with a failure to seek innovation is not that one will be left behind, but that one will be left out.

Those with an innovative mind-set operate in the present but live for the future. They incessantly challenge themselves and their companies to seek out what has not been done and ask why it can’t be done. Better yet, they relentlessly search for the way to do what has not been done. For them, their contentment is their discontent with what has not been done.

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