Until recently the pursuit of innovation has followed traditional business models and as such hasn’t really changed it’s focus from products and services. However, the quest to seek out new opportunities and drivers for growth for the 21st Century means innovation must take a spoonful of it’s own medicine and take a different approach. The world we think we operate in no longer exists. The world we actually operate in won’t wait for us mere mortals to catch up. It’s fiercely competitive, globalized, fast paced, unforgiving and redefines itself almost on a daily basis, so the traditional rules and methods of business and competitive advantage no longer apply, they are no longer efficient enough to cope with the increasing rate of change.
Super savvy customers and consumers now expect, by default, great products and services, so it’s no longer a point of difference and what was considered really good only a few years ago is now merely average, the price of entry is now unconventionally high! Differentiating through product alone is almost impossible as every competitor has access to the same materials, software, production methods and facilities, meaning whatever you make someone else can make too. Size and market share no longer guarantee anything meaningful as technology has bridged gaps once thought impossible and size now more often than not means lack of agility.
But fear not, chaos, uncertainty, paradox, and unpredictability are merely opportunities from which innovation thrives.
For several years now I’ve been teaching global clients about my perspective that competitive advantage in the future will be driven not by ‘what’ a company does but by ‘HOW’ it does it. That means a shift in innovation thinking from physical product to emotional connection and I think this is the next level of almost uncharted ground for innovation as it shifts the focus to behaviour.
My approach to innovation helps clients take a holistic look at innovation across the organisation instead of limiting it just to the ‘new product development’ department. The approach is about opening innovation up to wider participation (a fundamental building block of creating the illusive ‘culture of innovation’) to enable everyone to contribute. Not everyone in an organisation can or will be able to create new products but they will be able to contribute to the innovation agenda in their own way and it’s this wider perspective on innovation that drives differentiation in ‘HOW’ not ‘what’ an organisation does as it moves the focus to how the organisations behaviour differentiates it from the competition. The relationships between organisations and people both internal (employees) and external (customers) have slowly been devalued and I think it’s here that organisations need to focus their innovation efforts. It’s something I call ‘Differentiated Innovation’ and it’s about changing behaviour both inside (people via culture) and outside the company (customers via experience). This aligns perfectly to Simon Sinek and his work on the power of belief. Have a look at his TED talk, ‘How great leaders inspire action’.
Delivering next generation competitive advantage by ‘HOW’ an organisation does things means capitalising on intrepreneurship and innovation in order to define new experiences and areas of opportunity instead of competing to be ‘better’ in existing ones. In order to do that, just like an entrepreneur believes in something ‘more’ an organisation must do the same in order to inspire people to join the collective journey.
You have to build an organisation that is capable of acting like a start-up but can operate at large scale simultaneously.
Winning isn’t about ‘what’ you do, it’s about how you become ‘Outrageously Good’ at ‘HOW’ you do it. Creating the right culture and engaging your people to want to be exceptional is now a strategic imperative in order that innovation becomes a by-product of their organisational behaviour.
Innovation is a by-product of being exceptional
An organisation branded an ‘innovation leader’ will need to be a talent-rich, entrepreneurial community, collectively passionate about ‘what’ they do but more importantly ‘HOW’ they do it and to Simon Sinek’s point, Why? Their behaviour means we as customers will be prepared to change our behaviour and that will always be the greatest form of competitive advantage.
Thought Leader & Strategic Advisor on Innovation