Thursday, January 26, 2012

Innovation is in the Air... Ummm, I mean State of the Union

As many of you probably did, I also listened to President Obama’s 2012 State of the Union address to our nation with great interest Tuesday night. As I mentioned in my recent book, Living in the Innovation Age, President Obama in his 2011 State of the Union address challenged the United States to win the future by "out-innovating" the rest of the world. I was glad to see that innovation is still at the top of President Obama's mind in 2012. In fact, innovation was very prominently mentioned SIX times in his address to the nation.

Here are the relevant excerpts:
  1. Innovation is what America has always been about. 
  2. Innovation also demands basic research. 
  3. Nowhere is the promise of innovation greater than in American-made energy.
  4. Innovation led to the computer chip and the Internet; to new American jobs and new American industries. 
  5. We can also spur energy innovation with new incentives. 
  6. There’s no reason why Congress shouldn't at least set a clean energy standard that creates a market for innovation.
By the way,  a major recurring theme in his speech was "built to last," which was mentioned FIVE times. It seems that someone has been reading Jim Collins! :)

Saturday, January 21, 2012

Innovation Killer - Confusing Stability with "Maintaining the Status Quo"

I just read an article in the latest (January/February 2012) issue of the Harvard Business Review (HBR) that I found to be well-written, interesting, and very relevant to what many of us are facing as the global economy tries to recover from one devastating blow after another. The article is titled “How the Growth Outliers Do It” by Rita Gunther McGrath.

Rita starts with the premise (based on her research) that only a tiny percentage of large companies reliably grow the bottom line year after year. Those that do share certain characteristics. On the one hand, she states that they’re built for innovation. They enter new markets before competitors do; they’re good at experimentation; they hold everyone accountable for new ideas; and they can move on a dime. On the other hand, her research indicates that they’re extremely stable. Senior leadership have come up through the company; strategy and organizational structure stay consistent for long stretches; client retention is unusually high; and the corporate culture is strong and unchanging.

My Net Takeaways
Ultimately, I found her most significant conclusion to be that although stability and innovation may seem contradictory, it turns out that stability appears to be what makes innovation—and steady growth—possible.

As I think about the article in the context of the book that I just wrote (Living in the Innovation Age) and my statement in Chapter 1 “Status quo is the enemy of innovation”, I realize that many leaders confuse status quo with stability. This confusion, in my opinion, is the beginning of a deadly slippery slope of suboptimal growth, lowered morale, and a destiny of mediocrity.