Why do Organizations Fail to Innovate? Four Key Strategies to Lead by Innovation

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Established companies sustain technologies whereas smaller companies disrupt the status quote. Dilemma Zone is where these emerging technologies become known. Failure to act fast at this point has caused companies to vanish. RIP Kodak. From Apple: The Innovators Dilemma article written by Max

Different departments within an organization shall come together to create values for the customers. Right?

The assumption here is that the departments collaborate to deliver a final product/service. Although this dynamic is rational and expected, there’s another equally powerful force in current which contradicts our assumption.

Each department is pressured to deliver results based on the defined Key Performance Indicators (KPIs). What this gives birth to is the result-oriented mentality which leads to internal competition and neglecting customer needs.

From the bird’s eye view, each department is in the business of improving their own KPIs by few margins every sprint. How about the customers’ needs? Not a priority if it doesn’t help to improve the KPIs.

Does an Organization behave as such consciously? No. Water takes the shape of the container that’s poured into. The same goes for an organization (or a team). Your priorities and goals are set according to the governing operating system.

What does happen when an organization fails to prioritize customer needs?
When an organization fails to prioritize customer preferences, they fail to innovate. When you don’t innovate, you’re stuck with what worked in the past.

How does the downfall of a stasis organization look like?

1ST An Organization found a gold formula for consumer behavior; it hit success.

2ND And then it keeps improving the same formula.

Now here’s the twist. No golden formula is permanent through time. It changes as consumer behavior evolves and new market trends emerge.

3RD Therefore, an organization loses its edge. It can’t keep up with new trends. And it eventually serves Late Majority and Laggards users which are over 50% of total customers.

Source Wikipedia

1. Keep your teams small

(Ideal team members is between 3 to 7 — BEST 5)

Avoid big teams. Big teams mean
❌ More emails, alignments meetings, ego-fights
❌ Less time for getting the implementation right, fetching customers’ feedbacks and reflecting on past performance

2.1 Multi-departments team

Avoid Tribe syndrome. When a team comprised members from the same departments, it’d lead to the Tribe syndrome or US vs THEM i.e. you want to protect yourself and the tribe against others.

2.2 Mix teams intentionally

If one of your objectives to increase user retention, the right team for the job shall comprise members from marketing agency, product, design, tech and sales departments.

3.1 Break the feeling of ownership. Shatter the notion of legacy

Do not assign your teams to take care of a feature or module of your product. This is often what happens in big organizations i.e. one team is only responsible to optimize the checkout module. This is a poisonous attitude that results in teams protecting the legacy (What worked) as opposed to experimenting with new ideas.

3.2 Breaks the traditional notion of silos

Of course there’s a head of marketing agency to oversee the marketing agency activities of the organization, however, there shan’t be a marketing agency department anymore.

3.3 Instead, teams shall pursue objectives

Paint the vision of the organization. Define the organization overall objectives and delegate each objective to a team to pursue.

When you evangelize a vision instead of a KPI, it becomes clear for every member of the organization why we do what we do.

3.4 Trust the process and GET OUT OF THE WAY: let teams experiment and break things

If teams lack autonomy and are constantly fearful of being judged, then they stop experimenting. No experimentation, no innovation.

4.1 Make customer needs THE priority

Amazon knew that when it comes to e-commerce, customer convenience is the only constant to a winning long-term strategy. They forwent their profit for years to pursue customer preferences. An idea sounded so crazy in its infancy but over time proven to be THE golden rule of e-commerce.

Such a potent emphasize on customer convenience by Jeff Bezos made it clear for every team what to pursue. Every team mission was to deliver better customer convenience than before.

4.2 Don’t overlook the big picture

Many organizations want to learn from the Amazon approach. However, they get quickly stuck with short term wins when it comes to the customer’s needs and miss the big picture.

The secret key to Amazon’s success is that they never overlooked the big trends. They try to be the first to commercialize new consumer trends. Voice — Alexa? Drones Delivery?

4.3. Make sure the vision and mission of your organization is clear

It’s frightening to observe a big number of companies within each vertical sub-consciously follow the TOP DOG of the industry. I call them ME-TOOs or COPY-PASTERs.

Often what happens that a startup follows a winning recipe of a TOP DOG and of course they hit a relative success. Then they get busy forever milking it till they hit a dead end.

Often having a vision/mission workshop sounds scary, fuzzy and confusing to the founders and executives. I cannot emphasize enough how important it is.

Design your vision for the future, define the mission that most resonates with you and your values, and make them the north star of your organization.

I hope these key points struck a nerve in you. If you like what you read, leave a comment for me and share your feedback.

☎️ Talk to me in case you want to know how you can transform your organization. I’m here to help.

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