During a crisis or financial downturn, businesses that continue to pursue innovation perform better through the hard times and emerge from the situation stronger than those that shut it down. Yet most CEOs don’t rate their “innovation quotient” very high. It’s not a lack of good ideas. It’s a lack of innovation organization.–Sylvester Taylor & Robert Rosenfeld, writing in CLO
Innovation as a business function is all over the business news right now, partly because it was the only choice. Like most crises, the pandemic also stimulated and invigorated innovation. The pandemic has upended everyone and their organizations, causing a lot of pain and frustration, with so many fundamental changes overnight, from remote work to supply-chain collapses. And the effect continues.
“Sixty-six percent of organizations say their strategy will change significantly in the next 3 years, as they adapt to the pandemic and embed resiliency into their operations,” reports Capgemini.
Still, early in the pandemic, McKinsey discovered that most organizations “battened down the hatches," putting off innovation and focusing on core business goals. Innovation would have to come later.
The firm reviewed earlier historic crises and found examples of how innovation not only continued, but thrived: during World War II, the SARS outbreak in Asia and the global financial crisis of 2008.
Innovating firms not only survived, but came out stronger, beating the S&P 500 by 30% or more.
Since innovation is the antithesis of status quo, it’s not always easy. But we avoid it at our peril… “In today’s business world, routines are heading toward extinction. Change is constant, evolution is continuous, and companies need to be adaptable to ensure future success. Hesitate, and you might see your competitors speed by before you have long enough to blink.” – Jim Bailey, CEO of Americas, Capgemini, “Yes, innovation is supposed to be uncomfortable,” Fast Company, April 5, 2022
Innovation doesn’t have to be a “forced march.” Instead, it can be routine, integral to the mission – a business strategy supported by an organizational structure that facilitates innovation.
“Companies need to apply the right talent to the right problems — targeted innovation. Targeted innovation is an approach to developing solutions to a specific need. Companies can achieve this by organizing teams of diverse thinkers and teaching them how to value and apply differing styles to approach innovation and work. Then they can assemble teams designed and facilitated in a way that achieves the desired innovation outcomes.” – Rosenfeld and Taylor, “Organize to innovate: Learning’s role in creating an innovation environment,” Chief Learning Officer, March 29, 2022.
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