When An Oil Tanker Simply Won’t Do
In opinion / By Nigel Redwood / 19 July 2016
Change, why is it so hard to enact? Innovation, we all talk about it, but why do we rarely see it? Why, because of our oil tanker – eh? Let me explain more…..
I recently watched a keynote speech by Jonathan MacDonald (https://uk.linkedin.com/in/jonathanmacdonald) and much of the below is influenced by his session.
Change and innovation is so important for the long term stability of any business, let alone one that works in the technology sector. However, most organisations take part in low risk innovation because the questions of “what is the Return on Investment” always takes precedence and what is perceived as business common sense takes over. As a result, radical innovation is rarely embarked upon.
Management teams that ask “what is the Return on Investment” often have personas within their organisation as follows:-
Why is this such an issue, common sense, and protecting what you have whilst growing sensibly is a core belief of mine - people who know me often hear me speak of a "protect and grow strategy". However, you have to be prepared to step out of the safety blanket when the time is right because:-
14% of innovation is radical yet generates around 70% of company profits!!!! Wow, when you consider that, you should not be asking “what is the Return on Investment” but instead be asking “what is the Risk of Inaction”.
How though do you balance the Return of investment vs the Risk of Inaction? How? … well launch the speed boat and dock the tanker.
Our organisations are like oil tankers, and rightly so. They carry large amounts of fixed assets and inventory, they are heavy and sturdy, they can ride a storm and navigate successfully out of the other side, they have a plan and navigate a considered route and follow it meticulously, they are predictable and safe, with inbuilt fail safes and fire drills.
However to innovate, you need to be able to quickly steer left, veer right, reverse or stop, push forward, sink and emerge in order to radically innovate in a successful manner. What does this mean, well it means you need to decouple the P&L of the speed boat from the oil tanker in order to enable agile innovation and radical innovation, innovation which in the future will account for 70% of your oil in the hull..
Food for thought……