In these hard economic times, Neil Davidson urges employers to focus on innovation – or risk diminished growth and serious losses within the business.
Sometimes, when I use the word innovate, I tend to notice a certain glazing over of eyes, and my listeners slowly appear to retreat into themselves. And I understand why; the term can feel meaningless or can promote the kind of vague anxiety that many associate with change – or, even worse, restructuring.
But this isn’t always the case. At Maconomy’s recent ‘Change to Win’ conference, business leaders from across Europe came together to embrace innovation, and were eager to see how it could help their business move forward.
Why this focus on innovation right now? Because in hard economic times, there are only two choices – we innovate, or we die. That is the hard reality of the business world; and with news from the Office for National Statistics (ONS) that show the UK job market on the slide, things do certainly point towards a downturn in the job market. Even strong companies will disintegrate if they do not have the right perspective and commit to meet market challenges with innovation.
Look at the bigger picture
Taking a big picture view is essential for innovation to become meaningful and realistic. We need hard facts to make decisions, so that we can see change coming and act on it before it alters our business. We need to spot the trends early in order to be able to meet them.
Practically, that means acting on reliable figures and connecting the right people to the right information. It means avoiding bottlenecks of resources at one time and having skilled people sitting on the bench the next.
Enterprise Resource Planning (ERP) is the map on which we can begin to plan for innovation. Only by monitoring our resources, do we open up the possibility of deploying them in new ways. Put ERP-systems and a challenging business climate together and what do you have? A solid platform for innovation.
There’s nothing like hard times to shine a light on our business structures because it is now that small errors matter and organisational flaws can show on the bottom line.
According to American innovation-guru Stephen Shapiro, it is precisely in a downturn that innovation will save you. It is when you face diminished growth or even losses that you will feel enough pain to envisage something better and summon up the effort to make it possible.
Of course, that is not to say that you should rush out and invest large sums of money in outlandish projects. Instead, Shapiro suggests that this is the time to fail cheaply – in other words, to try new ideas on the small scale and grow through experimentation.
For example, this may mean having to adapt your service offering and go where the business is. Many HR firms, for example, are sector focused which, in buoyant economic times, is a strong business model. However, when the climate changes it can be difficult to be profitable when you are dependent on one area.
By looking at your skills and those of your employees, you can highlight new avenues that you may not have considered in the past due to issues such as time constraints or lack of necessity. By doing some research you can see what other businesses are offering, be it training days, online CV and interview support, coaching, you name it there should be nothing too ‘outside of the box’ that you shouldn’t consider.
If some ideas seem strong, then having the right company data behind you will give you the confidence to make the important decisions on who and how much you need to invest in the idea to give it a go.
You and your employees
But who is this ‘you’, I keep referring to? Sure, it is the company leader to some extent, but it is also your employees – they need a little space to think creatively and to ask different questions in their workplace.
We know that during the last downturn many companies let talented staff go. The trouble was that when the economy turned a corner they struggled to get the same quality of talent back through the door. Giving your staff enough space to be creative and look at new areas of possible business can be a lifesaver, and up-to-the-minute data can really help create confidence in going out and getting new business.
For internal HR departments, there is a great deal that can be done to support the business as a whole. HR should be at the centre of any successful business and this means that there is a great opportunity to be actively involved in analyzing the business processes to see where saving can be made. Cutting unnecessary expenditure through succession planning, or implementing resource planning technology are just a few examples.
There are a lot of talented people in business whose most basic needs are being met, and that means that there is the energy to think creatively, differently, maybe even dangerously.
The challenge is to remain alive to the possibilities and not become anaesthetised by daily routines and comfort. Admittedly, that is a big challenge. But with the right planning systems in place, you can react to these possibilities with confidence.
But if innovation is going to be more than just management-speak, it will require some discomfort. The changes will have to become lodged in the company culture and that may require some tough love. That said, if a crisis separates the winners from the losers, this is no time to lie down and die.
Neil Davidson is managing director of Maconomy UK Ltd, a global supplier of industry-specific business solutions for project and service-oriented companies.
2 Responses
Innovation – organic or systematic?
Interesting debate this… In the UK innovation has traditionally been a function of R&D, where systems and processes rule..but in the world of organisational development (OD) we can use innovation as a behavioural tool. Byrd in her work “The Innovation Equation” http://www.amazon.co.uk/Innovation-Equation-Creativity-Organization-Development/dp/0787962503 talks about:
Innovation = Creativity x Risk taking
Where Innovation is the ACT of introducing something NEW. Using her model (the Creatrix) http://www.creatrix.com she provides a tool to help individuals, teams and organisations to create the culture for change and being innovative ‘as appropriate for that organisation’ – Innovation in the world of finance or pharma, will be different from that of media.
Yes lest look at innovation – but as a part of the culture change not a process. Planning systems – yes but only if they are flexible!
Creating change.
Embracing innovation is certainly a heated debate within a company. The fact that companies must be innovative or they will die is a concerning issue for any company leader, but in most cases you’ll find that the real knowledge and energy to improve the way things work is already there, buried within the business itself.
The problem occurs because businesses aren’t always able to develop this capability due to politics, lack of trust or loss of focus, especially if the linkage between the true goals and the contribution from the organisation to those goals is lost. These conditions can build up slowly over time and act to diminish the natural enthusiasm to innovation, resulting in disconnection and lackadaisical attitude. On the surface people may be hugely busy chasing actions and doing tasks, but somehow real progress is not being made.
Looking at the big picture is essential; as focus is likely to settle on the ‘hard’ side of change – tasks and activities that need to be done, or the ‘soft’ side of change – “Let’s do some team building”. Either of these in isolation is unlikely to deliver . So how can you unleash that underlying energy and motivation to make change and innovation happen for the better?
Fundamentally, it has to come from the top, but smaller change can also be led from within a part of the business. Creating a ‘bubble’ of change can be a useful way of conceptualising an approach that can be used in such circumstances.
The concept is to create an area – the bubble – where different rules can apply. What lies inside the bubble represents those things that can be directly influenced or changed by a given initiative. What lies outside the bubble defines those areas which you may (currently) have less influence over, or little ability to change and you may simply have to acknowledge and accept.
The key is to create a different context inside the bubble for all the people involved – where new rules can apply and creatively can take place. Within this new context there is a new freedom to communicate, to engage, to express and to behave, differently. It frees up how people relate to each other, what their focus and priorities are, and most importantly, how they react when things go wrong. Outside the bubble – in a different context – life may remain the same, with the same old norms, old rules and old politics still operating.
The ‘bubble’ can start with just two or three people. Over time (days, weeks) others can be brought into it, challenging and empowering them to be different within the safety of the bubble. If you take this type of approach, things will really start to happen, innovation will become apparent.
Hugh Buckley, managing director at Quortex
http://www.quortex.com