The vital importance of innovation is the key lesson I have learnt from watching HMV join the long list of household brands that have gone to the wall in recent months.
HMV is in good company. Comet, Oddbins, Woolworths, Blockbuster, Jessops, Virgin Megastore, Habitat, Focus, Adams, Waterford Wedgewood, Setanta, Silicon Graphics, Readers Digest, Borders, Game, Lehman Brothers, Bear Stearns, among others, have all gone into administration and disappeared from our social consciousness (apart from a smattering of HMV, Blockbuster and Game stores, which are clinging on for dear life). EMI is being broken up and consumed, Northern Rock has been painted red and the once-all-powerful RBS and Lloyds banks are now shadows of their former selves.
Whilst the demise of the banking sector can be put down to an acute case of hubris and even outright dishonesty, the other failures were caused by an inability to change quickly enough; an inability to innovate.
There is nothing inherently new in this. Most of the corporate failures in the past (British Leyland, Polaroid, Rover, MG, …) came to grief through an inability to adapt to a changing market. What is new is the speed at which companies now need to do adapt. In today’s business world, the pace of change is faster that it has even been and new competitors appear from the most unlikely of places.
Innovation is now more important than ever. If an organisation doesn’t continually innovate, it will swiftly become irrelevant and, ultimately, cease to exist.
'That’s all very well in theory,' I hear you say. 'But how do I get my business to start innovating?' Here are a few tips:
Don't be led by dinosaurs
Creating an innovation culture is the key to success, and as with any culture-changing exercise, success starts at the top. The leadership must genuinely see the need to change and be committed to doing things differently. This requires a degree of honesty and analysis that can be difficult for many long-established leadership teams to do effectively. Leaders need to be clear and rational as to why the status quo is not an option, but they also need to be emotionally committed to changing the business – and they must stand firm once the first obstacles start to appear.
Always question your company’s right to be successful
Successful innovators are never complacent. Complacency is the killer disease every CEO needs to inoculate their organisation against. The moment your business becomes number one in its market is the moment you need to work out what you need to do differently in the future.
It is easy to change your business when you have a 'burning platform' (to coin that well-worn phrase). A true innovator changes their business when they are at the top of their game.
And yet I know of several organisations that have expended so much energy in getting to the top that they find it almost impossible to believe that their battle has only just begun. They want so badly to believe that everything will be fine as long as they just keep doing the basics well. But it won’t. Their industries are changing around them, and if they don’t innovate, they will soon become yesterday’s leaders.