I read some amazing statistics in a recent Wall St Journal article on innovation. In annual and quarterly reports filed with the Securities and Exchange Commission last year, the word “innovation” was used 33,529 times, which is a 64% increase from five years earlier.
Business book publishing reflects this number with over 250 books with innovation in the title published in the last three months, according to Amazon.
We certainly see that trend here at Soundview as many innovation books come across our desk and must be carefully reviewed to see if they offer new concepts for our subscribers, or the same old thing repackaged.
The point of the WSJ article is that the word “innovation” is losing its meaning within companies. The word is being thrown around to give the impression that a company is moving forward and looking for new growth opportunities when it may in fact be doing nothing truly innovative.
In The Innovator’s Dilemma and follow-up book The Innovator’s Solution, innovation expert Clayton Christensen separates innovation into three different types: efficiency innovation, sustaining innovation and disruptive innovation. It’s the disruptive type of innovation that provides the highest potential for growth and is also the hardest to achieve. For many companies, their innovation is not disruptive and this most likely contributes to the watering down of the meaning as we see in company reports.
Perhaps the best way to look at innovation is as a state of being for any company that wants to succeed and be around in the long term. Claudio Feser provides this chilling statistic in his book Serial Innovators: The average life expectancy of a company is roughly 15 years and only one in 20 lasts longer than 50 years. Feser’s solution is to become a “serial innovator” where the organization innovates continuously, reinventing itself as the marketplace changes.
Feser provides these secrets for serial innovation:
- Cultivate employees’ desire to make a difference.
- Build a team of learners at the top.
- Frame the vision and strategy positively.
- Build on self-managed performance cells.
- Promote employees’ drive to perform and grow.
- Invest in capabilities to quickly develop new assets and skills.
- Cultivate a culture that fosters execution and promotes challenge.
It’s possible for a company to have innovation in their DNA, rather than just using it as a buzz word. And with statistics like Feser provides, it may be the only way for them to survive into the next decade.