Innovate on Purpose: Innovating what we innovate

in which finally came to me last week.  For over a decade I’ve been working with corporations, trying to help them accelerate their ability to generate brand-new, interesting ideas to market as viable products in addition to also services.  In some instances we’ve been successful, in addition to also in different instances there were interesting failures.  I’ve recognized for a while in which some major challenges exist.  I wrote Relentless Innovation as a way to frame some of the things I’d learned about the way culture resists change, in addition to also how a “business as usual” approach can stymie innovation.  nevertheless even with these obstacles in which could seem we should have more innovation than we do.

What came to me finally is usually in which we are trying to do brand-new chemistry in old equipment, equipment in which is usually tailored for a more conservative, slow paced way of working where there is usually less change in addition to also more certainty.  Our businesses are “built to last” in addition to also meant to gain scale quickly in addition to also then lock in customers in addition to also channels to drive more revenue in addition to also profits.  In a day in addition to also age (say 20-30 years ago) when markets were more stable in addition to also there was less innovation, building a company with in which intent made sense.  Those days are over.

In fact we can look back 20 to 30 years ago at some key events in addition to also agreements in which at the time seemed relatively benign, nevertheless in fact have accelerated competition in addition to also innovation.

The unintended consequences of free trade

Just under 30 years ago, President Bill Clinton signed the NAFTA agreement, which allowed for mostly free trade between Mexico, Canada in addition to also the US.  in which was the start of many more free trade agreements, as different countries began to reduce trade barriers in addition to also increase global competition.  in which should come as no surprise in which the European Union is usually also almost 30 years old.  These agreements in addition to also others like them were Great for consumers, because they lowered prices, nevertheless often bad for established businesses in which were used to competing behind tariffs.  These agreements also increased the migration of lower skilled work to places where costs were lower.  in which migration isn’t brand-new – any task using a high labor component has always migrated to lower labor cost areas.  The difference was in which instead of moving through North to South, in which moved through the US to Mexico, as an example.

Globalization in addition to also free trade increased competition dramatically in addition to also introduced a shift in valuable skills.  within the US, manual labor in addition to also low skills jobs began to disappear while in which in addition to also finance skills gained credibility.  in which is usually also the beginning of the brand-new imbalance we see today, why there is usually an increase in disparity in incomes between people who offer the market manual labor or few skills versus those who can move financial markets or program software.

The internet boom

The internet also begins to appear about 30 years ago, moving through an interesting collegiate experiment to a system in which connects people across the globe.  Yahoo, in addition to also then Google began to organize the data on the web.  Google is usually 20 years old in which year (2018), meaning in which is usually leaving its awkward teenaged years in addition to also becoming an adult.

The advent in addition to also rapid advancement of the internet as a communication tool, then a content tool in addition to also currently thanks to Amazon a sales in addition to also fulfillment tool has shifted how we consume content, how we acquire goods in addition to also services in addition to also has significantly changed entire industries.  Just ask Sears, the Amazon of the previous century.

The evolution of the internet currently means in which I can do business with just about anyone, anywhere in real time.  Existing companies currently have far more competitors in addition to also the consumer has far more options.  Thousands of brand-new companies can compete to provide goods in addition to also services, increasing the opportunity for innovation dramatically.

Apple in addition to also Amazon

The third leg of in which stool, beyond globalization in addition to also the internet is usually the emergence of brand-new in addition to also somewhat rapacious companies.  Amazon in addition to also Apple are the avatars.

Amazon was founded in 1994 as a book seller in addition to also has gained scale quickly by increasing its dominance over physical retail, while innovating its business versions in addition to also entering entirely brand-new markets (web services as an example).  Amazon demonstrated in which people were willing to wait for the company to grow before becoming profitable, in addition to also cheered Bezos on to greater heights rather than demanding immediate profits.  Jobs returned to Apple in 1997 in addition to also created a company based on a few simple ideas – simplicity in addition to also integration.  Both of these companies explored brand-new value propositions in addition to also brand-new ways of working with customers.  Both are closing in on market dominance not seen since the guilded age.  Both give hints about brand-new operating versions in addition to also structures.

Stuck within the railroad age

Yet most corporations are stuck using a command in addition to also control organizational structure in which dates to the age of railroads, which were the first large corporations.  in which won’t be a surprise to learn in which the railroads adopted their operating versions in addition to also organizational structures through the military, the different large in addition to also bureaucratic organization of its day.  These organizational structures worked well when change was slow in addition to also many organizations had monopoly or near monopoly power, in addition to also when few people were educated.  Today, most of these stipulations aren’t true.  Change is usually constant in addition to also accelerating.  Few firms, different than Amazon in addition to also Google have anything close to monopoly control, in addition to also workers are far more educated in addition to also interesting within the meaning in addition to also mission of their work.

Corporations operate like glaciers, moving slowly in addition to also inexorably toward an almost predetermined goal, difficult to steer in addition to also with deep sources of internal, informal power in which seem oblivious to the environmental alterations all around.  Our business structures in addition to also versions are for the most part still based on top down command in addition to also control, very regimented (a word straight through the military) in addition to also hierarchical, when we need to be more open to investigation, more flexible, more adaptable, more nimble.

Innovating org structures in addition to also business versions

What we innovators should focus on are brand-new organizational structures in addition to also brand-new business versions rather in which products in addition to also services.  We can see evidence of some org structure in addition to also business style innovation within the “asset-light” companies like Airbnb in addition to also Uber, who have reworked their versions to demonstrate in which they don’t need to own the assets to deliver a valuable product or service. 

nevertheless these are just the beginning.  As both Uber in addition to also Airbnb have demonstrated, once an organization reaches a certain size they take on trappings of bureaucracy in addition to also perhaps arrogance in addition to also lose sight of customers in addition to also their needs.  They become increasingly rule-bound in addition to also inflexible, losing some of their advantage in addition to also creativity.  If we can innovate brand-new products in addition to also services with such alacrity, certainly we can innovate brand-new organizational structures in addition to also business versions in which allow businesses to scale in addition to also remain nimble, become relatively large nevertheless still able to respond to emerging trends in addition to also needs.  in which is usually the brand-new “holy grail” of innovation – creating organizational structures in addition to also business versions in which are able to shift as customers shift, completely flexible in addition to also nimble while still scalable.

Innovate on Purpose: Innovating what we innovate