The Challenges in Business Decision Making

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Why is it so hard for some successful company to be innovative?

Recently I gave a presentation to a publicly listed company in Hong Kong on the topic of innovation.

Many executives from successful companies are investing in initiatives to improve their company’s level of innovation but most of them are left disappointed due to internal resistance to change.

The analogy is like the brain of an organ transplant patient knows the new organ is vital to survival but it is incapable of controlling the immune system from rejecting the new transplant.

When companies become successful, one of their core competencies developed is to eliminate failure. This success factor becomes a major burden that work against the spirit of embracing real prospect of failure, which is essential in building up an innovative culture.

What seems to work but end up just a one hit wonder?

Some companies attempt to industrialise innovation through formal establishment like Innovation Centre of Excellence.

This type of initiatives usually starts off with a lot of enthusiasms (and even achieve some tangible quick wins) but soon found them running up against a wall when they try to extendthe momentumto the rest of the organisation.

Another approach that is becoming more popular is search for ideas outside the organisation through partnership with start-upaccelerators or incubation programs.

Companies scout for wild ideas that have proven to work before they are brought back into the organisation to be implemented.

While this is a quick approach to bridge the innovation gap,this is not a sustainable solution to build up the innovation competency for the organisation.

How do we move beyond a one hit wonder?

Focus on “People”.

Simple to say, hard to implement but it is the biggest hurdle any successful company need to overcome in order to be truly innovative. Why? It is simple. Building the innovation competency is not about what you do, but the mindset behind the people doing it. It is not the individual innovation that makes Apple an innovative company.It is its ability to surprise us time after time with innovative offerings.

One idea to increase innovation competency beyond the early adopters is “Cross the Chasm”, a marketing concept introduced by Geoffrey A. Moore in 1991 that describes there is a chasm between the early adopters of high tech products (the technology enthusiasts and visionaries) and the early majority (the pragmatists). This concept can also be applied to improve innovation competency of a company.

The improvement initiative begins with innovators generate wild ideas without the constraint from bureaucracy.

Visionaries validate those wild ideas with some demonstration of the possibilities as well as engage the pragmatists who have a real business problem to solve in prioritising the best innovation/problem pair to focus on based on the company needs.

Typically companies fail to extend the improvement initiative further after adoption of up to 16% of their staff (the Chasm). In order to move cross the Chasm, the company’s goal is to convert the pragmatists to play the key evangelist role in promoting their experience with the innovation initiative to the rest of the organisation.

Once more pragmatists are coming on board; the company will find innovation is now part of its organisation.

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