You and your competitors have been living together for the past 50 years on a remote island. You’ve been in a constant, daily battle for food and supplies but there has always been enough to go around. You've survived. You may have even prospered… but today seems different.
Resources are running low and all is not as easy as it once was. The island is getting smaller yet more people seem to be arriving and putting even more strain on resources. Each day you watch on as another one of your competitors either swims off to somewhere new or, more worryingly, starves to death.
You're starting to look a bit thin yourself now but having done the same thing successfully for the past half a century you have convinced yourself that you're Bear Grylls. You think you're more or less indestructible.
This metaphor is the scenario that many businesses are facing today. They are under pressure from new entrants to the market to innovate, yet don’t have the agility or necessarily the right people to be able to decide on the right direction and commit to it.
When it comes to innovation, businesses have three choices. They can either:
- Stay put – trust in your proven processes
- Follow the crowd and swim off to the same Island as everyone else, or
- Head out and look for a new island of your own
1. Stay Put
After all, 'If it ain't broke don't fix it'. Follow this advice and it's almost certainly just a matter of time before you and your company become extinct.
Of course, you may get lucky and you may think that what you've always done will continue to serve you well in the future, but everyone else has moved on (including your customers) and in reality so should you. Looking at the bigger picture, as a global economy we are faced with a growing talent shortage. We have an ageing population, where a vast range of jobs that are now in demand didn’t exist 10 years ago. The skillsets of yesteryear are no longer relevant and as such there are a lack of people who have the skills to thrive in today's society. Faced with this reality, staying put does not seem like the smart play.
2. Follow the crowd and swim to the same island as everyone else.
There are pros and cons to this approach. On one hand you risk being late to the party and may inevitably miss out on a decent proportion of market share, but on the other hand a lot of the dangers on the island would have been ironed out by the first people there who assumed a large portion of the risk.
Apple is probably the best example of this when executed properly. They famously use ‘second-mover-advantage’ to ensure that other companies’ products are essentially the guinea pigs for their innovations. If this works for the most valuable company on the planet then it can't be a bad idea. To execute it though requires a blend of big thinkers, innovators, pioneers and executors – both in the management team and the workforce as a whole.
3. Head out and search for an island of your own.
Become a true innovator.
This approach has the highest risk/reward ratio. You're gambling on the unknown and can make expensive mistakes, perhaps never even finding a new island at all. This could lead to severe pressure on your position and a loss of shareholder confidence. The rewards though can be huge as if you do get to an island no one has ever seen or heard of. Much like the early investors in the internet, building websites and businesses like Yahoo! that have become household names.
So do you stay true to what has served you well historically or roll the dice and look to invest in innovation??
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