Because innovation is becoming the key to creating value – just like productivity has been so for the last 100 years. In the 20th century, the winning formula for business was to deliver products that were good enough at the lowest possible cost. Today, and indeed tomorrow, everybody can deliver good products at a low cost. So the challenge of tomorrow becomes to deliver the best product at a cost that the customer is willing to pay. In other words: The best product at a price that is good enough.
That makes innovation the key.
The bad news is that innovation doesn’t flourish in most companies today. Innovation just doesn’t happen frequently in conventional hierarchical organizations that focus on shareholder value, which is what most businesses are today.
The good news is that is not impossible for a conventional, hierarchical company to transform itself into an innovation powerhouse. It isn’t easy either, but the recipe is simple:
Make the business meaningful, i.e. take down shareholder value from its present position as the business mantra: In tomorrow’s innovative business, shareholder value is no more the ultimate goal for a business, it is the consequence of doing the right things right. The purpose of the business should be to do something that has significant value to customers and to society, i.e. the meaning. The meaning of a mobile phone manufacturer is not to sell mobile phones; it is to connect people. And all innovation that company does, should be focused on connecting people better, faster and cheaper.
Build win-win partnerships in all areas, i.e. stop considering employees as employees – they are partners or associates. Stop looking upon customers as buyers – they are partners in value creation. Stop looking for ever cheaper suppliers – they are partners in building better solutions. Innovation flows if partners have a common goal, which is the meaning of the business.
Transform your departmentalized, hierarchical organization into a collaborative organization, i.e. a (virtual) place where everybody can work with, communicate with and innovate with anybody. Eliminate management levels and forget titles. They were great in 19 or 20th century bureaucracies, but they are superfluous today. Connect everybody with everybody and let everybody work where they want, when they want, with whom they want and on which task they want. You will be surprised how things starts to get done, faster, better and more creatively than you imagined.
Embark upon a new way of management: Value-based leadership instead of the power-based management you practise today. Why is it that your employees can buy real estate and take loans when you don’t allow them to buy a new desk for the office without some “responsible person” countersigning the purchase order?
Innovation happens when employees (associates) are happy, empowered, committed and liberated. You will never get to that point if you continue to run your business as if we were still in the 20th century.
Just do it!