Project Description

Innovation as the Status Quo

Many people regard innovation as one magical moment of insight, but in actuality, it’s methodology, not magic, that turns vision into reality. In fact, no matter how incredible an insight, game-changing ideas will almost always be squashed at companies without processes in place for moving new ideas forward. This systemic failure to adopt new ideas can be traced back to competing commitments—conscious or unconscious obligations that rival our stated goals.

In the business environment, where we all have a multitude of demands vying for our attention, innovations are seen as a distraction from growing and maintaining the current business. The stronger the business is the more resources are directed to preserving and building the status quo and the less time is spent developing new ideas that may fail or jeopardize existing processes or products. Growing the future business while maintaining the current becomes a competing commitment.

However, without innovation, businesses are woefully unprepared to capitalize on new market developments, adopt advancing technologies, and prevent competition from taking their market share. To survive, companies must be able to change with the times.

For example, in 1975 Kodak created the first digital camera, but fearing the cannibalization of their film development business, quickly buried this innovation. Despite many patents in this area, Kodak didn’t fully embrace its digital business until 2001 when it launched EasyShare, a line of point-and-shoot cameras. By then, competitors were taking market share and by 2012 Kodak, the former frontrunner in the photography industry declared bankruptcy.

Kodak’s failure to fully adopt digital sooner was no one person’s oversight but a collective shortcoming. There was no adequate methodology in place to encourage and embrace new technologies that would disrupt their current processes and business models, even if that technology had the potential to become the norm.

Apple, on the other hand, has methodically encouraged the adoption of disruptive breakthroughs, even at the cost of the current business line. In 1983, when the Apple II computer was doing tremendously well, Apple began investing in the Macintosh, a computer that would eventually make Apple II and its associated programs irrelevant. Then again, in 2007, right as the iPod reached peak sales at about 22 million units, Apple launched the iPhone, a product that would quickly begin to cannibalize iPod sales. In fact, almost all of Apple’s new products have taken sales from their existing products.

Apple’s methodology may seem counter-intuitive, but it has ensured their success for the following reasons. First, no company can stop the flow of new technology; if Apple does not gain advantage from technological advances, someone else will. Second, in the high-tech market, the first business in any given product line has a distinct advantage. Being first to market allows Apple to quickly capture the market majority, again and again. Finally, new technology can be used to expand into new markets. Apple has been able to extend from the personal computer market into the music and wearable markets by capitalizing on new technology. They intentionally sacrifice sales in one market category in order to grow another market category and increase overall sales.

All companies looking to be agile enough to deal with rapid change and spread into new markets need an innovation methodology. To work, this method needs to become embedded in the cultural fabric of the company.

A cultural challenge, such as this, must be addressed at all levels of the organizations. At The Energy Project we create culture change by addressing three key areas of the organization: individual’s mindsets and behaviors, leadership practices, and organizational policies. This creates a comprehensive “bottom up” and “top down” approach that can be used to address supply, demand, and overall assessment and implementation of new ideas.

By addressing the mindsets and behaviors of individuals, companies can increase the supply of ideas. When evaluating the supply of ideas, questions to ask include:

  • Are employees provided the time and resources to test new ideas?
  • Are employees regularly participating in developmental opportunities or collaborating with co-workers with different areas of expertise?
  • Do individuals feel that there is proper reward or recognition for implementing new ideas?

If individuals are creating a wealthy supply of ideas, leadership practices must be used to increase the demand for new ideas. Without proper demand for ideas, disruptive insights will be ignored or swept aside. Some questions to ask when evaluating success in this area include:

  • Do managers receive appropriate reward or recognition for supporting or funding new ideas?
  • Are leaders creating a safe and encouraging environment for employees to propose and receive feedback on new ideas?
  • Are leaders hiring or developing staff with expertise in desired areas of growth?

Once the supply and demand for new ideas are in place, organizational policies and practices must be used to mitigate risks, properly assess new ideas, and allocate resources for making the ideas happen. Some questions to ask when evaluating success in this area include:

  • Is there clear communication of company priorities, top initiatives, and the types of ideas they want to gather?
  • Is there a system in place to collect ideas, sort through them, and fund the most promising ones?
  • Is there a division of labor that diminishes individuals and leaders competing commitments between managing the present and future?
  • Is there periodic evaluation and adjustment to the company’s innovation process?

Only by systematically addressing all areas of the organization, from individual mindsets and behaviors to organizational policies and practices can a company successfully navigate changing environments and new opportunities. Without such a process, companies become geared towards preserving the current, the known, and certain, and subsequently under-invest in their future, making the unforeseeable even more uncertain.

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Tony Schwartz

Founder & CEO

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