Why companies can't innovate

A recent professional engagement helped me understand why it's difficult for most companies to innovate. The primary reason is, opportunities are missed in the industry in which a company operates due to it's refusal to look outside of the sphere (industry) within which it operates. To close one's mind to learning that comes from the outside can in many cases sound a death knell to innovation within.

This mindset of not opening up to learning from companies who may not be in the same industry is why a lot of opportunities remain unseen. In fact these are then spotted by firms operating on the outside.Take the Internet, which opened up opportunities for a lot of brick and mortar companies to capitalise on. Did they?
  • It wasn't ABC, NBC, CNN, the New York Times, the Wall Street Journal, Time Magazine, Business Week, or Newsweek that created the most successful information site on the Internet. It was Yahoo.
  • It wasn't Barnes and Nobles, Walden books, or Borders that created the most successful bookseller on the Internet. It was Amazon.com
  • It wasn't Sotheby's or Christie's that created the most successful auction site on the Internet. It was eBay.
  • It wasn't AT&T, Microsoft, or Cablevision that built the most successful provider of Internet service. It was America Online.

( The 11 laws of Internet branding, Al & Laura Ries)

Another reason why most company executives can't germinate innovative opportunities is because they fall into the Group think bias trap.

Consider this example of 'Group Think' at the BBC. An official report (study commissioned by the BBC), pointed to the danger of BBC programmes being undermined by the liberal culture of its staff, who need to challenge their own assumptions more. “There is a tendency to ‘group think’ with too many staff inhabiting a shared space and comfort zone,” says the report.
It goes on to highlight a “Roneo mentality” where staff ape each other’s common liberal values.

Sadly, this happens in most companies. People veer around to agreeing to something common, that they feel is supported by the most 'powerful', within the organisation. In spite of harbouring different viewpoints, most employees won't speak in order to 'not rock the boat'.

For companies to build within, a culture of innovation, they must, at times, look outside themselves and also promote diverse and often radical thinking.

Pic : http://www.friendsofmicronesia.com/


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