Interview – Steve McKee of “When Growth Stalls”
I had the opportunity to interview Steve McKee, the author of “When Growth Stalls” about the challenges companies face when they lose focus, lack consensus, or fail to maintain consistency with their innovation efforts. We also discuss a variety of other innovation topics including: barriers to innovation, education, and metrics.
Steve McKee is president of McKee Wallwork Cleveland, a full service marketing communications firm, is a BusinessWeek.com columnist and has been published or quoted in The New York Times, USA Today, Advertising Age, Adweek, Investor’s Business Daily and The Los Angeles Times. He has appeared on CNBC, ESPN2, CNNfn, Bloomberg radio, and network television affiliates across America.
Here is the text from the interview:
1. When it comes to innovation, what is the biggest challenge that you see organizations facing?
The biggest challenge is consistency. People tend to look at innovation as an occasional thing – a lighting bolt of inspiration – rather than the result of a disciplined process. Sure, major innovations don’t come along every day, but if you’re not steadily on the prowl for them you’ll never catch one. And not all innovations need to represent significant breakthroughs. Sometimes a small innovation in a rote process can produce tremendous benefits over time. Innovation efforts shouldn’t have an on/off switch. They should be steady state.
2. Of the reasons that cause growth to stall, which is the most damaging to the organization?
They can all be damaging, but the most insidious is a lack of consensus. The reason is simple: until your management team is aligned, none of the other issues can be addressed. It’s kind of like a marriage in which a couple is always fighting – about money, chores, in laws, whatever. Those are often not the real issues; the real issues deal with more fundamental things like trust and communication. You have to address the root issues first, and once you do all of the other problems can be addressed in turn.
3. Of the reasons that cause growth to stall, which is most difficult for the organization to recover from?
A loss of focus may be the toughest. If there’s a commitment to finding consensus a company can usually get there, and a loss of nerve can be turned around on a dime if the circumstances are right. Inconsistency can only be overcome over time, but with a steady hand it can improve day by day. But when a company loses its focus it can face a great deal of difficulty in overcoming the consequences.
I read about a resort hotel general manager who said, “It takes two minutes to cut your rates and two years to get them back.” He’s right (and it might take a lot more than two years). In order to overcome a loss of focus a company may have to divest a division, trim staff, reorient its brands, or do a host of other things. It can be expensive, painful and time-consuming.
4. How do you help your organization see that it is time to switch from defense to offense?
Since you used a sports analogy, I’ll continue it – you never want to play defense. That doesn’t mean you don’t have to sometimes, but the cliche is true: the best defense is a good offense. In business there’s no reason why you can’t be playing offense most of the time. When you drop the ball, recognize it and do everything you can to pick it up again right away.
5. What are some good examples of companies that you feel had their growth stall and then got it restarted?
I have to give Walmart its props. I took the company to task in When Growth Stalls for losing its focus when a few years ago it announced it was going to try to broaden its customer base. Of course, many retail analysts thought it was brilliant. I knew it was a mistake, and I’m happy to say I said so at the time in my BusinessWeek.com column.
Circumstances bore that out, and it didn’t take long for Walmart to regain its focus on “people who live paycheck to paycheck.” While the recession has been good to Walmart, the company isn’t sitting on its hands. It’s pouring billions of dollars into additional advertising, store remodels, IT infrastructure enhancements, etc. Walmart will benefit from its renewed focus for a long time to come.
6. What are some of the biggest barriers to innovation that you’ve seen in organizations?
One barrier is the need in modern business to measure things. Sometimes we get so preoccupied with ROI that we think if you can’t measure something it’s of no value. I would counter that by asking, “how much do you love your wife?” Love is impossible to quantify, but that doesn’t mean it’s not there – and in great supply. Anyone can paint by “the numbers,” but the best leaders have wisdom and good judgment that goes beyond what can be reduced to a spreadsheet. As someone once said, “no one ever asked for a microwave oven.” Or an iPod, for that matter.
Innovation efforts are not unlike venture capital investments (when you think about it, that’s exactly what they are) – you’re going to have a lot of flops between hits, but you can’t know ahead of time when you’re going to come up dry and when you’re going to find a gusher. The key, as I said above, is consistency. You either believe in innovation (and put your money and time where your mouth is) or you don’t.
7. What skills do you believe that managers need to acquire to succeed in an innovation-led organization?
Curiosity, of course. A desire to pioneer and break new ground. Patience. Willingness to fail. And an understanding that activity and productivity are not the same thing. I tell my staff “you gotta look up before you look down.” In other words, sometimes you need to gaze at the clouds before you can reduce something to paper or proposal. Take time to think, instead of always “doing”, and you’ll find that your “doing” is much more productive.
8. If you were to change one thing about our educational system to better prepare students to contribute in the innovation workforce of tomorrow, what would it be?
One word: privatize. What better way to demonstrate the power and value of innovation than by having students experience its benefits in their own educational environment? We’re trying to teach kids about the realities of competing in a global economy and the need for innovation, yet we’re doing it in a plodding, bureaucratic, unimaginative and restrictive system. Doesn’t make sense, and it’s hurting the kids.
My book review of “When Growth Stalls” can be found here.
Braden Kelley is the editor of Blogging Innovation and founder of Business Strategy Innovation, a consultancy focusing on innovation and marketing strategy. Braden is also @innovate on Twitter.