Innovation is about taking risk
If you’ve worked in corporate America long enough I’m sure you’ve heard the following….
“Our company needs to be on the cutting edge.”
Every-time I hear this from someone I think,
“What the f*ck… is cutting edge?”
If you’re thinking of a definition to what is “cutting edge” I guarantee you won’t have a common answer because everyone’s definition of “cutting edge” is different. Over time I’ve experienced too many meetings, side meetings, and rants about how a company can be completely transformed if they would operate by becoming “cutting edge”.
I’m not here to tell you what “cutting edge” is because honestly if I knew you would be paying me a lot of money right now to fix whatever company you own/run. I can, however, teach you about what’s stopping your company from moving forward and possibly having a seat at the table of innovation. Let me repeat, I can’t tell you how to be at the head of the table but simple have a seat at the table when cliches like “cutting edge” and the “next big thing” are discussed.
If you have a company that hasn’t made a step forward then look no further than the leader. My experience taught me that your company can’t move forward without leaders who are willing to shed their conservatives and take some sort of risk. If you don’t know if you’re a conservative leader or work for one then hopefully my story can help you in finding out work for or currently viewed as a conservative leader I hopefully can help with this story:
In summer of 2005 my business partners and I had an opportunity to throw a party at Essence Festival. As college students we felt earning this opportunity was a sign that we had a successful future in party promotions. Unfortunately, at the end of the party we took a hefty loss (at least for college students) and ended up owing $5,000. The following weeks was rough because everyone was either angry, sad, or ready to jump ship. There was 16 investors before we threw the Essence Party and afterward it was just me and few employees. I faced two options, shut down the business or run the company with my own money. I took the risky route and ended up producing larger parties than I could’ve ever imagined.
As a leader, it’s tough to resist the urge to go the conservative route because it’s usually the safest. I think we would all agree that safety route doesn’t always yeild you a seat at the table that most companies tend to strive for. If you want that seat then you have to increase your risk tolerance and lead your company.
Expanding your company’s capabilities can prove to be lucrative when you’re looking for more revenue. However, sometimes the decision to add additional products and services can be so costly that you loose the ability to innovate down the road. I believe a perfect example to use would be the company GE.
Over the past two CEOs and multiple decades, GE has gone from a brand synonymous with innovation to a company constantly in the news due to layoffs. GE’s ability to acquire almost whichever company they desire has allowed their CEOs to make costly mistakes of over paying for companies that don’t immediately align with their core services. When 2008 came around and the financial market started to spiral GE was hit hard due to their expansion into banking under the name GE Capital. Now why would a company, now currently know to consumers as the company who makes quality light bulbs, be dishing out loans under the structure of a bank. How does those two business models event match?
GE has some hard decisions to make and it seems that they aren’t wasting any time doing so. For you, it may be best to learn from GE and focus on specializing in what you currently offer if you want to your company to be known as an innovator.
If you want to read a glimpse of what GE is going through you can check out one of many articles on CNN Money.
Following best practices is the quickest way to receive the award for “Most likely to be mediocre”. Best practices may be revealed to you as the best way to run your company but only your company can make that decision. Some of you may be ready to fire off a comment below about how sometimes you need a little help but I would suggest to any company that if you’re looking for help on what your company needs to do next then look no further than your current customers. They will be happy to give you the cold hard truth about how well you’re servicing them.
I can remember a few years back I decided to sleep in on a random Saturday instead of putting in a few hours of work to prepare for the following week. I was awaken by a phone call from a client that I’ve been servicing for only six months. Her greeting was short but less than favorable as she cut to the chase,
“I can’t do this anymore with you. You’re not as good as I thought and I need a better developer. Oh and I need all my money back on Monday.”
Sheesh! I shook the sleep from my eyes and instantly became defensive, as you may have done if you just worked 60 hour work week and was waking up from sleep. I wish I could tell you that I was able to save this disastrous phone call but in the end I negotiated that we part ways under a fair agreement. From that point I learned a valuable lesson that I hope you can take with you. You don’t need best practices from the industry. A good client will tell you straight up if you’re servicing them right or not.
NOTE: That was the only client that I’ve had a problem with because she was my first and last.