Creative Innovation 2019 (Ci2019)

Are you sleepwalking into the death zone?

Friday, 2 March 2018

Graham Christie
Which-50 Insiders

Large and mid-sized enterprises in Australia are sleepwalking into a death zone, such is the lack of appetite and capability towards innovating. This mindset is nothing new, but the risk of perpetuating it has reached crisis levels due to the relative ease of powerful overseas companies and also dynamic young businesses entering every sector, hell-bent on disrupting and stealing customers.

All businesses whether they know it or not are in one of four Disruption Zones that maps the lifecycle of a market sector with regards to the disruption and change it undergoes.

What Zone your business inhabits today relies on an objective assessment of present and future market disruption. This produces a cocktail of often-unpalatable inconvenient truths and unsavory realities. Each Disruption Zone shares a relationship with how enterprises should be reacting. I’d add that it’s commonplace for corporates to spend a long time in the Planning Zone, which is the equivalent of rearranging the deck chairs on the Titanic, and also others feeling complacent in the Action Zone when in fact they are merely tinkering with expensive hobby projects.

This model is a good starting point to unlock the crossroads any business sits on.

And the crossroads manifests itself in multiple ways, here are three worth considering.

The ‘Investment in technology vs. investment in Customer’ crossroads

These aren’t diametrically opposed so why the ‘versus’? You’re right, they are not.  So why then is it common place for senior executives to feel frustrated with having an wealth of tech at their disposal, but at the same time remote from knowing and serving and selling to the customer expertly.  There’s been an arms race in martech and adtech, fueled by FOMO (fear of missing out), and this has led to complexity, perplexity, and a lot of platform fees.  A section in the recent WARC Toolkit 2018 illustrates this well, and talks to this particular crossroads.  In answering the question, “ Which elements of digital transformation will be the most important to your clients business in 2018?”, respondents cited Data and CX as the top two, with ‘(tech) automation’, and ‘martech investments’, down the list.

This is the time not for heaping on more complexity, but de-cluttering technology through a CX filter, and applying the innovation blowtorch to make the difference where it really counts.

The ‘last decade of leaders vs. the next decade’ crossroads

The last 10 years for enterprise has been commonly about streamlining, reducing costs, ‘harmonising’ the workforce, automating processes and the like. Primary focus being on the bottom line as a way to improve profits.  Managers and leaders have been hired on their ability to deliver against these goals.  The issue is that the next 10 years will be much more about topline growth to ensure the ongoing relevance and survival of the organisation.  The ability to see with clarity into the medium and long term, develop bolder strategies then energetically implement pathways to deploy these strategies requires a different set of goals, and vitally a different set of expertise to lead it all.  XB Insight surveyed 5000 leaders in the U.S. and looked at what key attributes innovative leaders have in comparison to norms.  They found the top 5 biggest differences were; ‘demonstrating curiosity’, ‘seizing opportunities’, ‘managing risk’, ‘leading courageously’ and ‘maintaining strategic perspective’.

John Kidder and John Geraci summed this up recently with respect to new CEO appointments, suggesting Boards should be looking no longer for just chief managers, but individuals that feel more like chief refounders.

The ‘Continuous improvement vs. Innovation’ crossroads

These terms are often transposed and muddled, but is important for organisations to firstly distinguish the difference – but then do both. Enterprises have been calibrated to deliver continuous improvement to their organisations with lesser or greater emphasis depending on current share price, market conditions, CEO mandate and more.  The tighter restrictions on these elements, the more modest the continuous improvement agenda.  Essentially continuous improvements are iterative enhancements like line extensions in CPG, or automation of service models to reduce friction points, or entry into an adjacent part of the existing supply chain, with R&D, and/or product groups usually helming them.

Innovation on the other hand is not tasked with incremental upgrades to business areas, but initiatives that are further from the home, such as new products or services that challenge market orthodoxy, or the invention of genuinely new technology.  The much-feted Clayton Christensen, Harvard professor and author of the ‘Innovators Dilemma’, differentiates what he calls ‘sustainable innovation’ from ‘disruptive innovation’ which is worth reexamining.  The fact is that all large enterprises need to both continuously improve and innovate, they need to deliver the results for the current financial year as well as create pathways that ensures survival in the years to come.

The rapid escalation of customer expectations, and the resulting seismic shift in markets means navigating these crossroads without delay, connecting technology, process, people and culture under a CX transformation approach.

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