martes, 14 de mayo de 2013

What's the cost to NOT innovate?

Just recently a couple of people I met, told me "I don't need to innovate, I've done the same quite successfully for the last 30 years...! " Another one told me: "I have a PhD in 'blah' And I know that is worth squat, because I know plimplumplaf..." All right Mr PhD, the answer is simple:
Because it's just matter of time before someone else does something different and eats YOU for breakfast! The question is not IF but WHEN you are someone else's breakfast, and more over if you are asleep without any kind of innovation for 30 or whatever years, or stuck inside a book (to no demerit of anyone, but reality in the trenches might be a lot different than in a classroom)

If you don't believe me, just ask Yahoo about Google, Microsoft about Apple, Bestbuy about Amazon, Monitor about Deloitte... and so many others.  In fact, What does Yahoo, Microsoft, Monitor, Kodak and Bestbuy have in common? Among other things, their innovation strategies turned cold, bureaucratic and arrogant. If that happens to those giants that were actually eaten for breakfast, What could possibly happen to the rest of us puny mortals?

So then the question turns into "How can I innovate? On what can I innovate?" Therefore panic starts to set in, as it should, about ten years late, but before you die, there's always something left to do as it is never too late, as long as the correct strategy comes into play.

So this may just well be the key rules for innovation success

1-Alan Weiss, consulting guru says: "never take a formula out of a box", I say DUHfcourse! it is like going shopping into your neighbors closet! It may fit, but how about your neighbor being 2, 5, or maybe even 20 sizes over? different taste? or even the opposite sex? Well, it may fit, I'll never judge that... but the odds of that being the best solution for you, most likely it will not. Using the same metaphor, you always need a tailor made suit.
2- innovation Never ever will come to fruition by what I call 'fingerocracy', or dictatorial orders. Never by democracy either as most innovation initiatives will stall... SO what then? Culture, that is the Only enduring way. Just look at Windows 8.
3-Flexibility. As my other post, anything called "strategic plans" are contradictory, at least as innovation is concerned. The difference is: targeting and flexibility. Lao Tsu said: "the best journeyman never arrives", that is, for an innovation initiative to really work everything must be flexible enough to allow changing circumstances. This is why 70% of initiatives fail. The plan did not have enough resources and/or needed flexibility, again like Windows 8.
4-Objectives. Yes, of course. And it is plural on purpose. Financial benefit must always be in second place, never in the first or the initiative is doomed from day one. In my other post I detail why I say this.
5- Strategy, fo course. This defines the Why's and the How's we are getting ourselves into necessary trouble.
6-Tactics: are defined as each and every step is taken in the flexible strategy. This was Monitor's mistake that was recently devoured by Deloitte.

If you paid enough attention I used the 'initiative' word in very relevant position, as we are still talking about the conceptual phase. Innovation per it's definition carries implementation meaning implicitly. That is, the concrete idea realization of itself. Whilst no steps are taken into making them come alive, it is just an initiative.

Most likely by now you are asking, well, Is this guy going to tell us about the ROI or costs and what not he promised? Of course!

The problem lies that in innovation initiatives there is no ROI to be delivered. Not in the same way financial guys are expecting with an amortization tables and fixed quantities and whatnot... "you deliver or off with your head!". Sorry, this side of the business is a tad bit different. And yes, even without a fixed rigid ROI it is a very lucrative business, just take a look at Google or Apple or even a few others and then tell me innovation does not pay off pretty damn nicely.

The cost of not innovating is death.

That is it. Some may be thinking "So what the ^$#@ is this moron talking about? Without any ROI there IS death" . Business death that is. If some are still with me, some concepts are a bit more ethereal and some think those do not fit in business'.

Each innovation initiative's ROI is 95% adequate objectivity which is directly proportionate to each partial result of each tactic, which are in turn directly proportionate in 95% to the overall plans' flexibility, timing and execution.
What that means is, for more flexibility, timing and execution in each partial step adapted to the current circumstances mixed with adequate objectivity, then more success rate will the initiative get, thus more ROI will the initiative will deliver. Any financier who's still with me dares to put some numbers to that equation?

So, Ok, as it is a concatenated equation within another which in turn depends on each step taken, How can anyone determine the undecimal? Of course there are ways and math models to take care of that, but that is my job to determine including its variability, as a good tailor would fit your suit to YOU. So, we go back to, you cannot take the formula out of a cereal box.

Talking about tailors, You cannot have adequate objectivity if the same king takes the needle and the measuring tape... That can be called INAdequate subjectivity of the target. Just as what happened to Monitor.
Did you think I forgot the missing 5%?. No, I did not. It is luck.

So, Mr financier's, C Suite guys and the likes: Either you innovate or competition will eat you up, aka business death.

SO How much exactly is your business death worth to you?? That is your non innovation ROI cost, customized for you.