Big innovators like Alibaba and Airbnb get a lot of attention, but the truth is that most companies struggle to innovate at the pace and scale needed to keep ahead of disruptive technologies and rapidly changing customer expectations.
A recent survey by Capgemini Consulting found that 90 per cent of companies believe they are too slow to bring new products to market. The same survey found that only 5 per cent of R&D staff in large companies are highly motivated to innovate. If you want to build a career as a corporate leader, those numbers should worry you. One of your most critical responsibilities will be to foster continuous innovation.
How will you do it? To give you some ideas, let me share the story of a Chinese retailer. Its entire industry is undergoing digital disruption, and its bricks-and-mortar retail business is vulnerable to nimble e-commerce players. It must innovate fast, or risk losing its customers.
The company asked Egon Zehnder to assess the strength of innovation in its various business units. We found that innovation levels differed greatly between units – and that the difference was driven by leadership style. Where leaders created an environment for people to experiment and collaborate, innovation thrived. Where the environment was hyper-competitive and fear-driven, there was much less room for people to help each other, and much lower innovation output.
The more open, collaborative business units have responded creatively to competition from e-commerce. They have reimagined their malls as gathering places that house experience-driven offerings such as yoga studios, coffee bars, and arts and crafts workshops. In the words of one executive: “We need to take the word ‘shopping’ out of the shopping mall.”
To learn more, I recommend the book Collective Genius by Linda Hill. She argues that solo genius is not enough: successful leaders must create the stage for others across their organisations to debate, co-create, and deliver innovations on a consistent basis.
This article appeared in the Classified Post print edition as Thinking anew.