Whatever You Do, Don’t Innovate?
Anders Liu-Lindberg
Leading advisor to senior Finance and FP&A leaders on creating impact through business partnering | Interim | VP Finance | Business Finance
Last week we discussed what comes next after Must Win Battles and I made a statement that I would at least try to provide such an answer. So here we are trying to discuss the answers regarding what should be the next strategic paradigm. Naturally there will be differences if you a big company or a small company, a new company or an old company etc. however the thing that comes to my mind is this.
If you are a big company don’t even bother with innovation
Let others do the innovation
Obviously this is a bold statement when I have discussed in many articles about disruption how companies need to be looking towards the future and figure and answer to the disruption that’s pending everywhere and on-going somewhere. However when looking at the future you quickly realize that trying to predict what will happen, what’s the next mega trend that will make or break your company or even what will be a disruptive factor in your industry, is futile. Instead focus on being good at three things.
- Buying innovators
- Bringing their products to market
- Cutting costs on a continuous basis
Naturally there will be some swings and misses when you are out buying innovators however if you are good at 2) and 3) you can afford not to hit a home run every time. In short don’t focus on innovation, but let others do the explorative work and focus on just a few core capabilities.
So I should just give up?
It does seem a bit like giving up on developing products that can be your company’s next blockbuster however unless you are Apple and let’s be honest even they struggled big time during their corporate life cycle then you can’t have it all. As a company, you need to decide what you are good at. Being both an innovator while having a lean and cost-efficient corporate structure is easy when you are a small company however as you grow bigger complexity creeps in at every step. Therefore, you must turn focus to keeping complexity at bay and the casualty here may very well be innovation. If you are good at cost cutting it’s not really a big problem as you will have the financial flexibility to go out and buy innovation. So really you are not giving up, but rather you are saving your company from the complexity trap that hit most companies as they grow.
So unless you decide to be an innovator in which case you should give up the idea of developing a big company there is no shame of letting go of innovation freeing up focus and energy to become good at the three outlined core capabilities.
Let me know what you think about my answer to what comes after Must Win Battles? Leave a comment or click the like button. I would also very much like to hear if you have a different answer?
Follow me for more articles about strategy, disruption, finance transformation and business partnering or see below for other articles linked to the theme of strategy.
What Comes After Must Win Battles?
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4 Ways To Lead Without A Burning Platform
Transform Or Be Disrupted And Die
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Anders Liu-Lindberg is the Regional Finance Business Partner for Maersk Line North Europe and is working with transformation of Finance and business on a daily basis. Anders has participated in several transformation processes amongst others helping Maersk Drilling to go Beyond Budgeting and transformed a finance team from Bean-counters to Business Partners. He would love the chance to collaborate with you on your own transformation processes to help you stay out of disruption.
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8 年Product life is getting shorter day by day and companies are responding to it by introducing use and through products. Therefore, companies need a continuous flow of innovations. Buying startups is an occasional affair and sometimes it becomes a cost burden if suddenly another startup comes up with better alternatives. However, in some sectors of industries innovation need huge amount of investment and its not for startups. It's for players already in the market with big surplus resources. Often you don't innovations for transformation, you just need bigger production scales.
Head of Project Management | PMP, Agile Methodologies, Scrum, SAFe, New Leadership
9 年I was really suprised, when reading the title of the article. And after reading the rest, I still cannot second this. First of all, i do simply have more sympathy, if a company is advantureos, future-oriented instead of having the tactics to bandwaggon just on trends. The second thing is, that I consider an adapter to be not with 100% addicted to what he is doing, to be more opportunistic then motivated from within. This gives me the feeling that whatever product i will buy from them might not persist. And as a final example, just look at the stock market. There is always a certain percentage of innovativeness, that is part of the current price. The masses consider, that if you work on something revolutionary, you will be able to grow. Personally, I do not think, that the size is ta main parameter to decide, if you should to research or not. larger companies have generally more resources, than smaller and can risk more to fail with maybe 0,25 percent of their staff working on something that will prove to be wrong afterwards. On the other hand, history is full of trendy large technology companies, that have to face their popularity decline and i think in most of the cases, the lack of innovativeness was on major cause. Grundig, Commodore, Nokia, Kodak - just to name some of those, that are coming to my mind.
HOHR at NTPC Limited
9 年Provocative thoughts. Big companies struggle with nimbleness , complex structure, beaureacracy while innovating. Big complex structure is the biggest killer of innovative idea. Better idea would be to sponsor small companies innovation, fund it, for what they lack most are the resources. Could create a win win situation for both.
Coach-consultant, Corporate trainer, Fractional project manager and Adjunct professor
9 年Provocative idea: I believe the best approach is to take a portfolio approach: Some acquisitions of novel offerings that are synergistic with the existing business, some internal innovation efforts and perhaps most importantly some collaborative efforts with smaller firms and academia. Without internal effort and collaborations, you may not have the trusted people on staff that can recognize and fully understand the potential of early-stage innovations especially with respect to your unique business models, and advise senior management to pay attention early. Unfortunately, some (many?) acts of omission cannot be simply solved by (an expensive) acquisition later on, as by that time the competition is fierce and some may have established a strong foothold.