What to do when your company can’t innovate?

Imagine the scenario where you have a running company with several customers paying a lot for your services. Does it mean your company is well established for the future? The answer is NO.

Don’t get me wrong. I’m not saying you should drop all of your customers or become non-profit. I’m just saying that your past/present success means nothing for your future. I can’t even choose which theory quote here to corroborate with that, but more important is to look at it as a trend. More and more companies are losing leadership. In fact I can’t even remember market leaders from 15 years ago. Can you? Even if you can, probably only few of them remains on top position.

Why does it happen? What did those companies miss? The market changed and they lost the ability to please their customers and make money at the same time. It is a very hard thing.

It is not about Research & Development

How much success would you have if your company owned a technology for touch-screens 30 years ago? Would that guarantee your leadership? NO.

Kodak reported the first OLED in 1987. Their R&D were incredible. They came up with a number of “last generation” technologies we use today. Still, kodak lost the battle against bad business. We could keep going with Boeing, Xerox, General Motors and many others. Or we could talk about great products like the Windows Phone that never meant anything to the market. The point is: R&D is not enough.

Business model driven companies

To win these days we need more than build new tech. We need to build new business models. Some may say that your product doesn’t matter, only your business model. That’s kind of true, but if you have a shitty product, there is no business model that can put you on the leadership position – unless you’re part of a monopoly. All you will get is to survive as a company. You will never make history – yes this post is intended for those who want to make history. That’s what happens with outsourcing companies. They make money and are able to scale under a huge management effort, but nobody wants to work for them. This is not making history at all.

That’s also the case for Banks and telecoms. They usually have a shitty product, but since it’s been a hard task to start a new bank, they led for a long time. Not anymore: fintechs are coming and their kingdom is under attack. If they don’t build great products now, their business model won’t last.

How to survive then? – The ambidextrous organization

It is not enough to have a great R&D department. It is not enough to execute very well your current business model. You need to do both: Execute and innovate. Execute your actual model to be able to keep your customer base satisfied and profitable. Innovate on new business models, building a new customer base for new ventures that you are already committed. Don’t forget that you need to explore new options for the future too.

Organizations who are able to execute and innovate at the same time are called ambidextrous. This is a must be for companies in the 21st century.

If you’re a startup you may not have a customer base and well established business model to keep. Your whole business model is a new venture at the beginning. As your customer base grows you will feel the burden of execution taking over everything else.

Many startups get lost on execution and forget to innovate. This is deadly.

The ambidextrous product strategy

When looking through the lens of product innovation the concept still applies. In fact it is even more important. Startups don’t have a large customer base and don’t know much about their future. Questions like Will my business model last? , Are we charging right?, How customers like our products? are always open loops on entrepreneurs minds. We know we need to address those questions continuously and we try to do so.

The innovation routine

Before the big launch it is easy to focus on the disruptive innovation. Everything is about developing the product and understanding the potential customers. It is an innovation routine.

This is the moment where you learn about your market and how you can be disruptive. You learn about the features and services your customer values. It’s your chance to find the right price for the offer. Those questions may sound cliché, but companies get that wrong all the time.

The innovation routine runs on an experimental base. Everything is an experiment and generate learning about the target. You have to build a multidisciplinary team, with an open mind. This team will build new, untested, solutions and requires freedom to do so.

The execution routine

When customer number one gets in, the execution takes place. If you get luck to go viral, a bunch of customers will pop up and execution ends up taking over everything. This is the good problem to solve. Your product team needs now focus on satisfying the customer base. The execution routine is completely different from the innovation routine. Execution is a known field for your team. You have the data. No need to get out of the building to keep the ball rolling.

Another thing that we know is that when we get the first customer in, we better have a great product and a very good support. We can’t fail. The product is not always in the best shape due to startup restrictions – which is normal – and we need to give customers attention.

Innovation is hard enough. Don’t make it harder

Innovating by itself it a very hard task. It is even harder when you have to do it and still comply with company rules or problems. Policies and politics makes innovating even harder and usually kill most innovation projects. The same happens when the innovative team needs to actually work on the execution routine at the same time. This may be motivated by financial restrictions or scarce skill sets. That’s probably why Narry Singh says corporate innovation doesn’t work

To be ambidextrous you need isolation

If you’re a somebody trying to innovate on an execution routine, my suggestion in one word: Isolation!

Isolate your project from the rest of the company as much as you can. This is the only way to really be ambidextrous. One movement must be apart from the other. Execution should not affect innovation and innovation should not affect execution. Each routine will have its own business model and must be treated this way.



Does your current company innovate? If not, why not? If yes, how? Leave a comment.