How do companies stay relevant? How do they stay competitive in the constantly changing dynamic marketplace? It’s innovation. Right? That’s simple. But how do you get it done?
At Lightning Rod Ventures, we believe in a disciplined approach to innovation. This article examines 3 principles that will help any organization develop innovative strategies on a continual basis to deliver value to the customer.
The first principle is being aware of where you are at in your industry.
Companies and organizations need to know where they are at on the “battlefield.” They need to know where they are at and where their competitor is at. The “battlefield” is the value chain of any specific industry. Where are you at on that value chain? And at that point in the value chain, what goes into delivering value to that customer? Those are the questions that drive innovation. A constant awareness of the surroundings and the external environment leads to disciplined innovation. A key component of knowing where you are at on the battlefield is remaining humble when you are having success. Leaders need to be constantly looking for the changing tides, not out of fear, but when you are in a position of strength, it is easy to become complacent and let your product offering become stale. Past success is not indicative of future success. The strategy that worked yesterday won’t work today in the current volatile changing market, and leaders need to be continually assessing the situation. Hubris and overconfidence in this market will lead to false assumptions and lead companies into a downward spiral that will result in lost market share and decreasing shareholder value.
The second principle is having a clear and simple company mission but allowing and encouraging challenge and dissent in the organization.
Companies need leadership that state and maintain a clear and concise mission for the company and that structure the organization to achieve the mission as best as possible. Any organization that has unity and buy in into the overall mission will outperform any organization that is not congruent in their mission and strategy. Silos and bureaucracy slow down communication within organizations and this has been realized and eliminated in many organizations by the agile method. Informal communication is a key component for innovation to flourish. However, unity around the company mission needs to include healthy debate and challenging questions at all levels regarding the best strategy. Companies need to be constantly challenging assumptions and testing hypotheses to seek the reality of the situation. The pursuit of innovation needs to include a culture of risk taking and performing small batch experiments without fear of consequences or failure.
The third principle is effective leadership.
The last article gave insight into our thoughts at Lightning Rod Ventures about effective leadership, and this is our thoughts on how it applies directly to innovation. Effective leadership and continuous innovation when integrated correctly will allow any company to move quickly, to change their strategy, change their personnel, or change their business model. However, it takes discipline in the little things (the organizational culture, the business model, organizational efficiency, etc.) for a company to innovate effectively. To be able to move quickly, see a target and move on a target in the business world, companies must have a defined set of principles, laid out clearly by leadership, that can guide the organization. An organization must also have the discipline to hold fast to those principles. These principles set the roadmap for the guiding strategy that will allow you to innovate, compete and win. There must be a culture of discipline but also a culture of risk taking. For example, when teams fail to hit a milestone or target, leadership must be disciplined to look at the reasons for failure. Leadership within the organization must be able to debrief failures openly and honestly with their team and then move forward with more risk taking. This is how companies continuously improve and resist stagnation. It is how companies survive. The business world is constantly changing, and companies must change with it. How do you manage that change? How do your mange that innovation when it moves so quickly? You maintain discipline to your core principles, to your core values.
At Lightning Rod Ventures, we have 5 core values: Communication, Integrity, Responsibility, Results and Leadership. Discipline to each of these core values will allow innovation to thrive, and in turn allow companies to hit critical milestones and scale with stability and flexibility.