A Fear of Change
Reading Gijs van Wulfen’s excellent blog on LinkedIn recently, I was struck by the way he was able to verbalise so many of the blocks that we, as an innovation agency, face from prospective clients.
In his article, he laid out ten personal lessons with regards to businesses and their approach to innovation. The essence of these lessons is that most companies are naturally fearful and risk-averse and will avoid innovation -inherently associated with risk- at all costs.
Inertia… Leads To Failure
Businesses will choose not to invest or spend money where they can help it, or at least until they have no other option but to try something new. Take a company like Blockbuster, who sadly realised too late that they couldn’t compete with the Netflixes and LoveFilms of the world.
Rather than seeing how they could better serve their customers through emerging technologies, they sat on their hands and even turned down the offer to buy Netflix for $50 million in 2000. By the time they started exploring digital options, it was too late and they filed for bankruptcy in 2010.
The moral of the story here is that by taking no risk through innovating and creating new ideas, you end up with exactly what you were trying to avoid in the first place.
Of course, Blockbuster is an extreme example of inertia. As it happens, for a lot of businesses, continual improvement beats innovation. True innovation –not the trickled-down version that companies tout which merely constitutes incremental change– IS risky and can be costly.
A Risk Worth Taking
Depending on which research you read, only 1 in 10 innovations succeed. However, 20% of breakthrough innovations can account for as much as 70% of revenue for a company. The risk is definitely worth the reward.
We would argue that the right approach (asking tough questions at the outset), combined with extensive market research, can eliminate all but very few known risk factors; and most companies will gain great advantages from TRUE innovation.
Not only do companies benefit financially from the successful launch of a new product, brand or service, but once innovation is placed at the heart of a business, it permeates into a company culture and creates an entire organisation of innovative thinkers. This staves off inertia and virtually future-proofs against failure.
As Blockbuster would concur: innovate or die.