“Creativity? What’s that? I don’t want my people to be creative”, said the owner and CEO of a very successful Russian company to the consultant who was making a pitch for the virtues of innovation. About ten years later his company, one of the first financial services company set up in Cyprus to cater for Russian investors, has grown very profitably and as far as I know it is still doing very well. The consultant will never know whether this client that never was, would have done better or worse had his services been hired.
I know a very successful entrepreneur who spent a lifetime setting up, buying and selling companies in wholesale, retail, manufacturing and financial services. Innovation, in his mind, was only a thing he (and only he) should be doing himself and he only did it at the level of company ownership and deal making. He was an excellent deal maker, finding opportunities, with an uncanny sense of timing and risk-taking. The clusters of companies he created, merged, spun off and dismantled were masterpieces of corporate affairs but the companies themselves were not exceptionally innovative – at best state of the art in their own local markets. He asked nothing more of his managers and employees than to run the companies efficiently.
We often say that today companies have no option but innovate or die. Yet why do some uncreative organizations survive and even do well? Here are some reasons:
There are no competitors
Monopolies can flourish for many different reasons – regulation, small market size, government control. Although some monopolies have produced incredible innovation (NASA landing man on the moon, the state health system of Germany and France) many have succeeded in prolonging stagnation. The catholic church took hundreds of years after incontrovertible proof was provided to accept that the earth revolves around the sun, and it did so only when science became perceived as a true competitor to religious dogma.
Competitors are even less innovative
“The one-eyed man reigns in the kingdom of the blind” goes an old Greek saying. Or, as some have said in the modern conference room, when a bear is chasing you and your friend, you don’t need to run faster than the bear, just faster than your friend. Being slightly innovative when most others are entirely uncreative does indeed give a competitive edge. And for a variety of reasons some sectors/countries/niches etc are clearly slower to change than others. In these cases companies are clearly “getting away” with little or no innovation. The question is for how long?
Innovation works very well at one level only
While the full innovation potential of an organization may not be realized, it is quite possible that it is or has been by design or default quite innovative at some time and place. The case of pharmaceutical companies with brilliant product innovation in spite of unimaginative marketing comes to mind. Or the opposite where brilliantly innovative marketers sell products that leave much to be desired. This is also the case of the Russian company (first in its business) and the entrepreneur (good at deal making) mentioned at the beginning of this article, though these companies, by leaving the human creative potential in their organizations largely or partly untapped, are surely under performing.
At some time every organization will feel the pressure to innovate but that time can be quite prolonged. Avoiding innovation can be a good conscious strategic choice. And so, sadly for the lone innovation consultant, the case for “don’t want to innovate” can indeed sometimes trump the case for “innovate now or die”. For some time at least.
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Dimis Michaelides, Managing Director at Performa Consulting, is global business consultant and keynote speaker on The Art of Innovation. His book, The Art of Innovation: Integrating Creativity in Organizations, was published in 2007.