part 4
Building and executing your vision – from ideas to results
‘Excellent firms don’t believe in excellence – only in constant improvement and constant change.’
Tom Peters, author of In search of excellence
When times are tough, disrupt
By Glen Manchester
Received business wisdom talks about how innovation plays a pivotal role in leading economies out of recession. But, all too often, untargeted R&D spend is instead only promoting further stagnation. Business owners, large or small, should instead consider the possibilities for disrupting their markets when facing a tough economy.
A wake-up call came in July with the announcement of a 2012 Innovation Index Nesta, the innovation foundation. According to Nesta, investment in innovation by British businesses has been in decline over the past decade, with a fall of £24bn since the current recession began.
These are sobering numbers. Yet the report, again, confirms the vital link between innovation and economic growth. As an entrepreneur, what I particularly like about the Nesta index is that it recognises that traditional research and development is only part of the innovation picture. It also measures the downstream co-investments needed to bring new ideas to market, such as design, software development, innovative training and organisational development. In fact, on the latest numbers, R&D represents a meagre 13 per cent of innovation investment.
When I launched my company in the customer communications market in 2001, I looked to use the uncertain times as an opportunity to disrupt the status quo and create a new market. Amid the fallout of the dotcom bubble, we designed and built an enterprise software platform that is today used by 14 of the world’s 15 largest investment banks and some of the world’s largest energy and commodity trading companies.
Anyone familiar with the ‘innovator’s dilemma’ theory, a phrase coined by the book of the same name by the Harvard Business School professor Clayton M. Christensen, will recognise the patterns. Firstly, our innovation which leveraged new disruptive technologies created a new market in the downturn. This was followed by years of sustaining innovation, with incremental improvements to our technology to meet the evolving needs of our customers.
The cycle has now gone full circle. Although we now have hundreds of employees rather than a handful, I’ve opted to disrupt the business once more. Keeping a watching eye on technology and consumer trends – especially with the impact of social media and mobility – we saw that we needed to change.
Two years ago, amid the global economic turbulence of the times, I made the decision to invest in a new disruptive innovation strategy. We have invested heavily, tripling the size of our engineering teams. Once again, we’re setting out to create a new market rather than focusing our innovation investments on small iterative product improvements.
Thinking this way can help a business avoid a troublesome ‘Kodak moment’. For a century, this company based its business on silver halide film and paper, but when faced with the market disruption caused by digital technology, could not respond, opting instead for sustaining innovations in its core business and not diverting enough focus to digital imaging. We all know what happened next.
Don’t be afraid to keep your start-up flair and instincts as your business grows. Consider how much profit should be diverted to sustaining innovations, and how much on a future moment of disruption.
Every chief executive needs to ensure the balance of innovation investment is right. I know from my own experience that it can be daunting to invest in innovation when belts are being tightened, but times like this should be seen as great opportunities. Economic pressure forces markets to look for cheaper, more effective solutions. Leveraging this opportunity to disrupt and innovate should give British companies the drive to succeed and come out the other side of the recession stronger.
As the UK’s double-dip recession sharpens once more, it’s time to be bolder with British innovation.
 | Source: Manchester, G. (2012) When times are tough, disrupt, Financial Times, 7 September.© Thunderhead.com 2012. |
Being a leader is about changing things from the way they have been happening. When you are a leader, something different happens because of you, because of who you are. Leadership is rooted in a set of attributes ranging from self-awareness to the ability to influence.
Leadership is the act of a leader. It encompasses everything from gaining credibility, to managing a team, to building a network.
Parts 1 and 3 reflected on and presented techniques so you could examine, first, yourself and, second your environment. Also highlighted have been the importance of the team and the concept of co-creation, both of which should remain at the forefront of your mind for this final part.
Part 4 focuses on the bigger picture and looks at how you can have an impact on the world around you, from the following angles:
- Vision and innovation A widely recognised skill of leaders is their ability to craft a vision, to give a purpose to their organisation in the medium to long term. Different ways of crafting a vision and reasons to do so are explored in Chapter 9. This is paired with some reflection on whether or not it is necessary to be innovative.
- Strategic thinking Once the vision has been established, translating it into concrete action is the next natural step. Leaders play a critical role in that translation process, by reflecting on effective communication processes and ensuring that their vision is always in tune with an ever-evolving environment. (This is explored in Chapter 10.)
- Execution The true test of a leader is execution. How do you deliver your strategy to deliver your vision? Various skills are required, such as the ability to lead change, make decisions and progress and monitor results. (This is the topic of Chapter 11.)