How Innovative And Flexible Is Your Business?
To be innovative we must be flexible and embrace change. Innovation is a special type of change program. It has many other attributes that make it deeply fascinating and sometimes difficult or impossible to grasp, but change is what it is.
Sometimes this change is fast and sometimes slow, but change is a competence and managing change can be learned, developed and practised.
The thing that trips us up most often is that we get no practice, we have to improvise. Most of us would not stand up at a comedy club and improvise a 10 minute set. But our bosses expect us to do this and we gladly assume the role.
Of course, we can never practice the stages of change without actually changing. But in our businesses, we crave stability. We either change once in a lifetime or we keep doing so in a way that we don’t have time to bed in the changes that have been made.
Worse still, we invent an innovation program that changes rapidly. This results in bewildered staff, unhappy sponsors and management shaking their heads at the hastily drawn up Key Performance Indicators.
Even in changing business environments businesses make the assumption that volatility will be low.
For obvious reasons, the least volatile part of a business is related to finance. For example, consider the process of budgeting. The budget is usually set once a year and tinkered with occasionally. Often budgets are reused. It might not be efficient to use zero-based budgeting (budgeting from scratch) but how often are the inputs to a budget reexamined?
But what happens when there is volatility in the marketplace? Commodity prices can rise and fall quickly. Recently we have seen fuel prices affect the costs of all goods that need to be transported. Crop failures can push up food prices and regulatory changes can force huge burdens upon us all.
What would you do regarding your finances if the cost of fuel rose by 50% due to events in the Middle East? What would you need to do and how fast could you do it? Would it spell the end anyway?
Some businesses do conduct some scenario planning or create a series of ‘What if?’ statements so that they have some idea what to do. This is a little like leaving instructions for a simple board game. What happens when the board game is different from the one mentioned in the instructions?
To be truly agile (nimble, flexible, innovative or whatever adjective you favour), a business must create a system that reacts automatically to its surroundings rather as a chameleon does in nature. You might find it useful to take a look at the following two posts No More Change Programs – Meet The Super Chameleon and Innovation Constipation – Are You Suffering?
How do we create this elusive flexible or innovative business? Well if you are starting a new business you can start as you mean to go on. Although whoever is providing startup funding might take in interest in why you are doing something that does not obviously have a ROI (Return On Investment).
If you are a larger business then they are ways of making the necessary structural and cultural changes. The businesses that have been doing this for years make it look easy. It is not! However, once you have mastered this (a bit like riding a bicycle) then things get easier.
If you want to know more or would like some case study material then please get in touch.
So your homework for today is to answer the following:
How does your company cultivate change and reinvention capacity in its people and managerial processes? What currently works? What can be improved or replaced?