Batten down the hatches. Keep your head below the parapet. Ride out the storm. The fact we have quite so many phrases about the importance of defensive action during a crisis is enough to tell us something about human nature.
None of those are inherently bad pieces of advice – particularly during tough economic times. However, it’s very easy for defensive action to translate into inaction. When some people talk about battening down the hatches, what they really mean is that it’s better to do nothing at all than it is to risk making a wrong move.
There can be truth to that too, but only in the most extreme situations. Most of the time, the reality is that those who stand still do nothing but stagnate. Keep your head down for long enough, and by the time you look up you’ll find that someone else has taken your place. No matter how tough times may be, it’s imperative to keep innovating – you can be sure your competitors are.
Not all kinds of innovation are the same, however. There’s innovation that’s focused and aligned to what customers really need, and there’s innovation for the sake of it. While the second of those is a dangerous approach at the best of times, in today’s economy it’s a certain way to put your company at risk. That’s why targeted innovation is so important, and why I believe that thinking small is the way to deliver big results.
New and shiny vs. smart and sensible
Let’s take a step back for a moment and think about what innovation actually is. The dictionary definition refers to it being “new and different”, and – as with the metaphors above – I think that interpretation is one of the biggest problems here. New and different is 100% right, but there’s a definite tendency to believe that what it actually means is “new and shiny”, something flashy to capture the customers’ (or even the CEOs) imagination.
That’s not the case. Innovation isn’t always about directly delivering customer value, particularly during a tighter economy. Inward-facing innovation is just as valid, even more so if it frees up people to work on higher value projects. Improving the way that you deploy code, finding a way to smarten up inefficient server processes; they might not come with the same cachet as a brand new product, but that doesn’t make them any less important. There’s another factor at play here, and that’s the organisational cost of innovation. Product development authority John Cutler has a great perspective on this (pictured). He suggests that, by prioritising new capabilities over managing and enhancing your existing ones, all you really end up with is a lot of unplanned work and interruptions. Innovation is important, but only as a part of the whole.
Naturally, that begs a subsequent question: “where exactly should I innovate?”. To me, the only way to answer that is to think about the bets you want to make. What would you like to happen as a result of your choices, and how much are you willing to bet to find out if it does?
Essentially, to innovate successfully, you need a hypothesis that you want to test.
Small theories, big results
Take Uber, for instance. Uber didn’t start out with a vision to reinvent the taxi industry, it began as a hypothesis that people would be willing to travel in private vehicles. Airbnb was the same, beginning with the idea that people would pay to sleep in a privately-owned room. Simple theories, tested in a comparative microcosm – Uber in a single New York borough, and Airbnb near a Las Vegas conference centre.
Now, these are extreme examples. I’m not for a moment suggesting that there’s a direct line from testing a hypothesis to turning an entire sector on its head. What I do believe, though, is that the scale at which you think doesn’t change the results that you can deliver. Starting small and focusing on incremental changes can still give you the validation and momentum you need to effect a much bigger change.
Naturally, it can be difficult for large enterprises to think in the same kind of way that start-ups do. Not only are startups not constricted by the kind of labyrinthine legacy systems that larger enterprises are, they also enjoy a level of operational agility that allows them to put something out into the world and iterate on it, rather than having to test and refine it over the course of many months. The challenge is as much cultural as it is technological.
If we loop back around to Cutler’s diagram on innovation, one of the underlying points is that you can’t separate innovation from the everyday. You can’t create an innovation team that does nothing but dream up big ideas. Not least because big ideas are often impossible to deliver in the real world. Instead, consider giving your product people (at the coalface) the space they need to innovate, as well as manage the day-to-day.
That leads me back to the start of this post. When the pressure’s on, that temptation to batten down the hatches will always be there; to focus on nothing more than keeping the lights on and keeping your head down. If a company that prioritises innovation over everything else is at one end of the spectrum, then one that shrugs off innovation altogether is at the other. Finding that sweet spot between the two is essential. Because you can be sure someone else has and now they’re ahead.
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