I was asked this in a roundabout way by an internal innovation team that met some “light resistance” to its efforts from senior leaders. Like many innovation teams, the building of an internal business case is a rite of passage for anyone wishing to initiate an innovation program in his or her company. This isn’t a bad thing – it’s actually a key step to thinking about and capturing your aims, benefits, goals etc.
The leadership’s main concern was that engaging in enterprise innovation would distract employees from their primary functions. The irony was apparent: While looking to generate disruptive innovation in the marketplace, the last thing senior leadership wanted was employees interrupted from their day tasks and therefore not be as productive.
As we discussed the details of the business case we built a compelling argument that would ensure senior level buy-in and we went away happy in a job well done. But something ate at us as the day turned to night.
The last two years, as in most, have been lean in their marketplace. Although the company is an industry leader that traditionally invested heavily in R&D efforts to be innovative and even grew in some markets, overall the company experienced a downturn.
Regrettably, and like many around the world, the company’s leadership addressed this downturn through layoffs to cut costs and balance the books. I don’t want to go into the full story or how they came to this decision but when I look at businesses collectively I question: Is this really our best response? Is there something better we can do?
Before I answer that let me take a step back. When we look at innovation poster children there is so much focus on the improvements we can see: products, services and business models. When we need new innovation in a hurry, perhaps leaders don’t see it as an option because it takes too long to achieve. But what if there was a way to innovate in eight weeks and make millions of dollars?
Then another question really struck me: For whom do we actually innovate?
I can think of many people: Customers, shareholders/owners, The Boss, our boss, and even ourselves. But I think we’re missing a really important group – our colleagues.
This is where we must champion a paradigm shift in leadership thinking. We have a duty of caring to innovate for our fellow employees. No one likes laying off people en masse because of cost. But are we becoming complacent or negligent into thinking we have no other option for cutting costs? Is there another way?
One of my favorite Global FMCG companies faced this challenge in recent years; the demand for its products fell because people were not able to replace their home appliances as frequently. The company’s leadership could have slashed the employee numbers, balanced the books and sunk their culture of productivity for at least the next year, if not two. Happy cultures typically out-perform others by up to 7 percent – so this is no small undertaking. But it happens, and so many ignore the collateral damage that can affect overall company performance. Things don’t get better; they actually get worse.
This Global FMCG confronted this by turning it into a series of challenges to every employee – not just management. They focused on things from cost to process efficiencies. Over eight weeks of discovery, selection, refinement and implementation, they achieved a $25 million realized reduction in their cost base. Now that’s positive action. And it took only eight weeks!
It also shows some real innovation chutzpah to tackle the problem head-on and make it a shared problem. We’re in this together. And guess what? People are smart. They know if they don’t work at this together, their duty to innovate for each other is at stake.
This isn’t about shareholder dividends or C-level bonus schemes – this is about continued and successful employment for you and your colleagues with a company that is smart enough and concerned enough not to take the easy way out of this problem.
We innovate for each other for many reasons. Leaders – be smart, innovate your way out of this and over time ensure you are in such a position next time so you become as immune as you can be to wider economic changes.
Lay-offs are the easy, lazy (although possibly inevitable) way out – if you’re more concerned about your golf handicap than your employees’ future, you’re not a leader. Get off the golf course, roll up your sleeves and innovate to the best of your ability.
Even if you have to eliminate positions, you will have massive respect from employees and experience less downturn in productivity and loss of talent as the best workers jump ship in fear they are next.
So the question is: Who do we innovate for? and not whether we should. Innovation is inevitable in an ever-competitive world. Let’s champion a paradigm shift and make sure we innovate for each other. We have a duty of care we cannot afford to ignore.
Matt Chapman is a senior innovation solution consultant at Imaginatik, an innovation management consultancy and software company based in Boston. He has helped companies all over the world adopt innovation cultures, and is a regular speaker and writer on innovation best practice.