Business Irish

Sunday 24 February 2019

Alan O'Neill: 'How to stay relevant and innovate with a fail-safe plan'

As competitors can take big leaps at lower cost in today’s high-paced business world, every firm must continually update and reinvest

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Alan O'Neill

What would the world be like if the great innovators never existed? Imagine if Thomas Edison’s light bulb never glowed, or if Alexander Graham Bell’s telephone didn’t ring. If Charles Babbage, the inventor of the first computer went in a different direction, what would Steve Jobs have done?

But it’s not just technology that has benefited from innovation. We have also benefited from innovation in science, music, medicine, the arts, language, processes, systems and more. As the world around us changes at an exponential rate, so too are our suppliers, competitors, customers and our own people. The barriers to entry for new competitors are coming down all the time. Globalisation makes it easier for your customers to explore other options to yours.

And for many of us, technology enables our competitors and new entrants to take big leaps at lower cost than in the past.

The bottom line is that for each one of us to remain relevant in our chosen market, we have to be willing to continually update ourselves, possibly even reinvent ourselves — and innovate.

I was speaking last weekend at a conference organised by the National Housing Federation in the UK. Housing Associations are ‘not-for-profit’ charities with a social purpose mandate to provide affordable housing.

Their current business model goes back to the 1960s and they are taking a hard look at themselves to see how they need to change for the modern tenant. Innovation will play a key role in this change journey and will include technology, collaborations, mergers, processes, organisational structure and culture change.

For some readers, that may not all seem like innovation. But to a community like housing associations that have been working a particular model for years, it is innovation for sure.

You too may have a business model that has worked for many years with varying levels of success.

But in a new world, what worked in the past is no guarantee of success in the future. To encourage innovation requires a fresh look at your culture.

What does it take to enable safe innovation?

I often meet organisations with a so-called ‘blame culture’, where it is safer to keep your head down than to try new things and risk failure.

For such organisations, it’s not safe to fail. People feel that they are witch-hunted down for getting it wrong. For one company that I’m familiar with, key executives get physically sick or don’t sleep the night before a big meeting. They dread and fear the wrath of a bullying boss who exposes them for failing with a new product or for trying something new.

Clearly, that is shocking. That culture impedes growth and the organisation loses out in the long run. In saying that however, it’s not fair to expect an organisation to just turn a blind eye to failure when significant cost goes down the drain, not to mention the opportunity cost, the time wasted and the morale implications.

So what’s the right balance?

1  Encourage innovation — but not without structure

Leaders ought to encourage creativity and innovation, then reward and recognise outcomes. But they should make it very clear in advance, what the criteria for success are. Then the individuals involved should apply rigorous project management or ‘design thinking’ methodologies to their concepts. Such plans should include scenario planning, cause and effect analyses, time limits risk analysis, and a business case.

Lack of structure can lead to too much subjectivity and not enough objectivity.

2  Make it safe to fail — but don’t accept incompetence

It’s totally appropriate and reasonable for innovation to be encouraged. But it’s not realistic for individuals to be sloppy and wasteful and not get called out on that. As with all things in life, there is a need for balance here. Whether it’s a success or a failure, discuss it openly and learn from it. Even when applying rigour as described here, not every idea will work out as expected.

But the project is not a failure if learning is extrapolated, logged and communicated, so as to prevent a recurrence.

The Last Word

Innovation is essential for every organisation in every industry. And your culture needs to support an environment where it is encouraged, but not in a reckless or sloppy way. I’m a big fan of collaboration and inclusion especially when it is safe and appropriate to do so.

But be careful, collaboration without honesty and structure can lead to poor consensus. And poor consensus should not be an excuse for bad judgment.

One person has to make a decision and be accountable at the end of the day.

Alan O’Neill, author of Premium is the New Black, is managing director of Kara Change Management, specialists in strategy, culture and people development. Go to www.kara.ie if you’d like help with your business. Business advice questions for Alan can be sent to sundaybusiness@independent.ie

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