Innovation is EssentialSo if innovation is so important, why do so many companies spend all their time making tiny process improvements and watching their competitors steal their customers with innovative new products and services? Clearly the problem is not that business owners and managers don't see the need for innovation. Many just don't know how to encourage innovation. However, most actively discourage innovation - not on purpose, perhaps, but very effectively. Let's look at two small companies. One is an example of how to discourage innovation. The other is an example of how to encourage innovation.
Discourage Innovation - Kill The CompanyCarol runs a small family business. She is very good. She knows what she is doing and is able to tell everyone else specifically what to do too. Unfortunately Carol's business has been going downhill. She has had to lower her prices, which reduces her profits. She keeps losing business to her competitors who come up with better products and cheaper ways to do things. Several long-time employees have left and it takes a lot of time and effort to train the new people in the right way to do things.
How can that happen? Carol is smart and works hard. She pays her people well. She tries different things. People are happy in the office, but they don't talk amongst themselves much; they just all stick to their own jobs and try to do them right.
Carol believes in MBWA (Management By Walking Around). You see her walking all around the office watching what people are doing and when they do something "wrong" she steps in and shows them how to do it right. Often people call Carol to their work station to ask how to do something new. They all remember how Carol reprimanded Jeff when he tried something new. She didn't even have time to listen to his explanation of why.
Carol's approach works well when you are training toddlers or teaching math in grade school. It would also work on the battlefield. But it will not produce the innovation Carol's company needs to survive and prosper.
Carol is overlooking the greatest asset of her company, its employees. Each of them has unique experiences, education, and background. They have different perspectives, different problem solving skills and techniques. There may not be a single one of them who is as smart as Carol, who knows the business as well as she does, or who is as good at innovating as Carol. But, as smart as Carol is, she is not smarter than everybody.
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