How Do You Pick the Right Moment to Innovate?

Not innovating is no longer an option for an organization that wants to be in good shape the day after tomorrow. Hit by COVID19 or not, innovation is moving fast forward in every sector; whether or not your company moves with it.

Active innovators want to innovate – Reactive innovators need to innovate

In practice, I see organizations approach innovation in two different ways: those who want to innovate and those who need to innovate. I call those who want to innovate the active innovators and the ones who need to innovate the passive innovators. As you can see in the chart below their roles are defined by the moments they really innovate their business. Every company, business unit or product has its lifecycle of introduction, growth, maturity and decline. Active innovators, who want to innovate, give innovation priority at the end of the growth stage. Before they reach maturity they want to innovate, often for several reasons simultaneously:

·?????To keep their revenue stream growing;

·?????To maintain an innovative mindset;

·?????To boost internal entrepreneurship (intrapreneurship);

·?????To address changing needs and wants of customers;

·?????To lead in technology;

·?????To expand their business by new business models, distribution channels and customer groups;

·?????To anticipate on new governmental regulations or a market liberalization.

Reactive innovators, on the contrary, wait. They wait until they get hit by a crisis, their markets saturate or get disrupted by new technologies and/or business models. They reorganize, lay-off people and prioritize innovation only at the start of their decline stage when they need to innovate. They need to innovate most often with only one goal in mind: to stop revenues and profits from falling and build a new future for their organization.

Both types of innovators have their own challenges. The good news for active innovators is that there are plenty of resources available as the company is doing well at the end of the growth stage. Their challenge is to cope with a lack of urgency at the operational level of the organization: “Why should we innovate? We’re damn busy and doing great!” The good news for the reactive innovators is that there’s great urgency also at the operational level of the organization, as there’s often been a collective layoff due to the business slow-down. Their challenge is compounded by both a lack of resources and a lack of time, as they will have to move quickly.

We all hear and read a lot of the top innovative companies in the world, like Apple, Google, Samsung, Amazon, Tesla Motors, IBM, Facebook, Starbucks and many more. They dominate the news. But there are more than 200 million companies worldwide. And you better believe the vast majority can be classified as reactive innovators. So, if your organization waits until not innovating is no longer an option, just remember that you will be accompanied by millions of other businesses.

You better repair the roof when the sun shines...

For 2022 you have a choice to be an active innovator or a reactive one? I learned that when you want to repair the roof, you better do it when the sun shines, so what will it be?

innovative regards,

Gijs

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