Having a vision of where you want you want your organisation to go is all well and good, says Tom Cheesewright, but if your organisation resists innovation then change is going to be tough
You have a vision of the future for your organisation. It's credible and everyone buys into it. But in this vision your organisation is doomed. What do you do?
This is the question increasingly posed to me. "The future doesn't look good for us, how do we change?" "There's an opportunity coming, how do we take advantage?"
I have a theory that most organisations filter out innovation in the natural course of their existence. If you have a working business model, what you want are people to follow that model with the minimum expenditure of resource, maximising profits. You don't want people blue-sky thinking all the time: that's expensive.
The problem with this is that the pace of change is accelerating. Deep thinking about the future may damage your margins but it will improve your longevity.
1. Innovate or die
Ultimately this is a question of innovation. But how do you get an organisation that hasn't innovated in years, maybe decades, to start innovating again? The approach taken by many of the most innovative companies around the world can best be described as ‘Think big, act small’. This is the motto of Vinod Khosla, one of America’s most influential investors, and the title of a book by Jason Jennings, a well-known business speaker. But here’s my humble take on what it means for organisations seeking change.
2. Think big
When you want to think big, the question is not "Could we do this better?" There will be plenty of time for that later in the process. The question to ask is "Are we doing the right thing?" Sometimes the whole remit of the organisation will need to change.
A classic example is companies recognising that their products have a limited existence, but there is a bigger service or experience around those products that may be more sustainable. Newspapers and magazines are going through this at the moment. Initially they tried to replicate the offline experience in a digital format, but increasingly they recognise themselves as a collection of branded content services the user might access in a different of ways.
3. Act small
Acting small is a very short way of describing the agile, iterative approach that most start-ups now take. It means building a product with the minimum investment and only scaling it when it is proven. Fail fast, fail cheap.
Take my last business, CANDDi, as an example. When the EU introduced a new law forcing websites to allow visitors to opt-out of cookies, we saw an opportunity. We thought people might want an extension to our product to manage this problem. But that doesn’t mean we built a product. First we advertised it: advertising is cheaper than building. Only when we had proven there was a market with paying customers on board did we actually build the product, over the course of a few days.
What we put out the door was simple and crude – a minimum viable product in lean start-up terminology. But it worked. It did exactly what had been advertised. Once we had paying customers we could collect their feedback and refine exactly the parts that mattered to them.
4. Don’t fear failure
This approach works for many companies. But switching to it is not easy. As the author (‘Stop Talking, Start Doing’) and entrepreneur Richard Newton reminded me last week: large organisations have a corporate fear of failure that is instilled in each member. It's a natural result of breeding out innovation.
Failure is vital. If you don't fail sometimes you haven't done anything new, and you aren't learning very much. The important thing is to fail fast, fail cheaply, and learn every time. Getting corporations, and particularly senior managers, to not only understand this but to embrace it as part of corporate culture, is probably the biggest barrier to innovation.
Without an acceptance of failure, the iterative model – basically a series of small failures leading to success – simply doesn’t work. Organisations remain locked into designing large solutions from the top down. Solutions that everyone is so committed to seeing succeed that even in the face of all evidence from customers and partners, they get driven through.
This rarely succeeds. Instead of a few small failures, there is just one very big one.
Tom tweets at @bookofthefuture