For any executive or entrepreneur, this may seem like a blasphemous statement. Innovate or die right? In today’s fast-paced world where technology is advancing at an increasingly rapid rate and the modern markets are growing more complex every day, it can be easy to jump to this black-and-white thinking. Calling “innovation” a business buzzword would be a massive understatement at this point, and whether its fear of irrelevance or falling in love with a flashy new technology, there are often poor motivations for driving innovation that do more harm than good.
Much of this confusion comes from the complex and often convoluted definition of innovation itself. As defined by Oxford Languages, innovating is when you “make changes in something established, especially by introducing new methods, ideas, or products.” Seems fairly straightforward, right? However, many people focus on the new methods, ideas or products, and ignore the key factor: make changes in something established. Innovation is about moving past the status quo, completely and totally changing the existing order of things by creating new markets, shaping the future of industries, or creating new industries entirely.
To be clear: change is inevitable, and in no way am I saying that innovation is unnecessary, because even if you aren’t innovating your competitors certainly will be. Rather, I am saying that it is imperative for you to understand the costs, benefits, and risks so you can formulate the right strategy for your organization. Sometimes the best approach for your business will be to drive the change, but just as often it may be best for you to react instead. Just look at Internet Explorer. Microsoft did not invent the internet browser, and yet for over a decade it was the browser of choice for millions of people. Another such example is the iPad. Tablet technology existed well before Apple introduced it, but it is customers rather than technology that drive innovation, and they were able to build a product with mass appeal by integrating existing technical and functional capabilities with design and marketing.
Innovating within a sector may be the right choice for your business, but below we explore some of the scenarios in which it may not be the best time for you to invest in innovation.
Your main business is broken
This may seem like a no-brainer, but investing in innovation when the core of your business is broken can only lead to failure. If your business is struggling, it may seem like the solution is to double-down on innovating in order to create new markets and drive profits, but in fact turning inward and looking at your operating model may be the wiser choice. Ask yourself this question: does your business have a solid foundation on which innovation can build? Innovation isn’t free, it doesn’t happen overnight, and many ideas may become interesting inventions but don’t end up being valuable innovations in the marketplace. One way you can ensure this is the case is by creating a common language of innovation within your company. As evidenced earlier, innovation can mean different things to different people which is why making sure everybody within your company is on the same page as to what “innovation” means for your business is imperative before taking any concrete steps toward the innovation itself. In summary, innovation won’t push your business forward if you don’t lay the foundation for it to successfully do so in the first place.
Your employees aren’t behind the vision
Trust is also a fundamental part of any innovative company, and employees can see right through executive teams that aren’t truly committed to innovation. If your employees don’t feel like their contributions have the possibility of being considered they will likely never bring them forward, and push as you might for an “innovative team,” they will never be able to deliver. If trust is currently broken, repair that trust through a vision, strategy, and goals that show people their ideas are being seriously considered and that there is a process for choosing, funding, and developing them. Innovation requires an investment in organizational capability and readiness, because if your employees don’t understand what innovation is and why it is important to the continued success of the organization, you may be surprised to find that they sit on the sidelines.
You are lacking unique, valuable customer insight
While brainstorming sessions and the ideas generated in them can be valuable, they don’t necessarily drive innovation within a market, or guarantee the success of an innovation. As stated earlier, it is the customer that determines whether an innovation is successful, not the invention, technology, or product itself. Innovation for innovation’s sake will get you nowhere if you don’t have the customer support to back it up, and the only way you can get that is by developing a new solution to a problem that delivers more value than every existing alternative. This isn’t to say that by following ethnographic research, behavioral data, and other sources of customer insights, an innovation is a guaranteed success, but if you don’t have this base in reality the odds are much higher that it won’t be.
You don’t currently have the capacity for structural changes
So you have a great idea that could innovate within your sector. Does your business have the capacity to sustain it? Committing to building an innovation environment often requires changes to organizational structure, rewards and recognition, budgeting, executive compensation, business unit goals, and other structural elements that your organization may not be ready for. While it may be a hard pill to swallow, sometimes your business may not be capable of moving fast enough to realize the market potential of the innovations they may create. One classic example of this is Xerox PARC, where in the span of roughly a decade researchers for the company invented nearly everything important in the digital revolution prior to mobile, from the core technologies of personal computers to the graphical user interface based on windows, icons, mouse, and pointers. However, although Xerox invented everything they failed to capitalize on their massive disruptive innovation, allowing others to come in and do so instead.
Your innovation came to early
Sometimes even though you have a great idea, there are roadblocks that may mean it isn’t the wisest time to move forward with it, such as customers not being ready or the technology lacking scalability. For example, Compaq actually developed a hard disk-based MP3 player years before Apple launched the iPod, but chose not to launch it. Why? Because without the elegant navigation and music organization capabilities that Apple had it would have certainly failed – in fact, the iPod itself didn’t take off until three years after its launch, coinciding with the launch of the Windows version of iTunes. Although Uber is known as the disruptor who revolutionized online car services and the gig economy, others had floated around for years but customers weren’t ready to try them at scale until the capability for a map showing nearby available cars was developed. Airbnb certainly wasn’t the first company in the vacation rental-by-owner market, but they were in the right place, at the right time, with the right marketing for their innovation to have success. The list of examples goes on and on, but all of this to say that sometimes recognizing the tipping point is as important as the idea itself.
To say “innovation isn’t always the answer” may be a bit of a misnomer. As Peter Drucker said, “marketing and innovation produce results; all the rest are costs” and it is impossible for a business to grow without innovating somewhere along the way. However, the feeling of newness and incremental change is often mixed up with real innovation, the kind of truly disruptive change that turns industries upside down. While unfortunately you can’t always predict what will be the tipping point that brings about disruptive change, you can control other important factors of your business such as how the company operates at its core, what its approach to innovation is, and how it communicates that vision to the company as a whole. Change is inevitable, and while one option is for you to drive this change, don’t forget that sometimes reacting and pivoting can still add value.