Creative Destruction and the Innovation Imperative

The truth is that the Great Recession has unleashed a tidal wave of creative destruction. Many marketplaces just .... the MBA program. He is also a member of ...
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BRIEFING 02-2013

Creative Destruction and the Innovation Imperative Many established brands are failing – unable to cope with the wave of creative destruction that follows a deep recession. Here are 10 actions that leaders need to take. Market places can change rapidly after deep recessions and there is much truth in the statement that only the innovative will survive. We can see the evidence of this on the High Street right now. Just count up the number of long-established brands that have fallen since 2009. Innovation is the key to survival. But innovation can be a real problem, especially for large, established organizations. You can’t ‘order’ your organization to be innovative – so what should leaders do?

DRD Advisory Ltd 2/21/2013

The Evidence I don’t know about you, but my local High Street is full of empty outlets. The latest casualty has been the video rental store Blockbuster. But, here in the UK and elsewhere, Blockbuster is only one in a line-up of once famous names. HMV, Jessops, Comet and Woolworths – these are all names now consigned to the history books. The truth is that the Great Recession has unleashed a tidal wave of creative destruction. Many marketplaces just won’t be the same again. But we mustn’t make the mistake of thinking that this is just a challenge for the more mature, established brands. Creative destruction is a challenge for every organization. Facebook and Twitter are, for example, facing new, innovative competitors right now. The Response and the Challenge The response is easy to say – it’s time to innovate or die. But this is something that is far easier said than done. The fact is that you cannot order an organization to be innovative. The leader’s role is more about creating the right conditions for innovation to take place and then watching and nurturing the first signs of activity. But if you cannot order innovation to take place, there are things that a leadership team must do. From my research, there are 10 essential points that every leadership team should focus upon to spur on innovation. #1: Aligning the Team From my own research, this is the most important step. You must have a team that gives one broad, consistent message to the organization. Throughout the team there must be total buy-in to the need to innovate. If there are any dissenting voices then, in time, mixed messages will appear and the effort will grind to a confused halt. Some of the successful leaders that I studied created, from the outset, a ‘dual-core’ leadership team. What do I mean by a ‘dual core’ team? I mean a team where some have primary responsibility for safeguarding the current business portfolio and others have responsibility for exploring what’s new in the outside world and driving through experimentation and innovation. This type of approach is especially effective when the outside world is turbulent and unpredictable. #2: The Story The fact is that most organizations have a common Achilles’ heel. The weak spot is that they are, quite frankly, not good enough at exploring the future. Research tells us that around 80% of organizations feel that their vision of the outside world needs widening. What is required is a simple, clear view of how the competitive landscape may well change – and why ‘the old ways’ won’t work. This view of the future sets out the mandate for innovation. Which takes me to the third key point. #3: The Innovation Palette The story has to make reference to the types of innovation that you think are necessary for your organization to excel at in the future. Too much of the time when we talk about innovation we are not too clear about either a definition of ‘innovation’ or the types of innovation that we are looking for. Innovation needs to be defined. If innovation isn’t clearly defined, then most people will think only about ground-breaking ‘new to the

world’ innovation – which may not be what you have in mind! Rather, you should be clear that you’re looking for innovation in one, two or three dimensions – (i) innovation in tot