Why do established businesses fail? Because they miss the future. And what contributes to them missing the future? Many things, among them is a focus on maintaining the status-quo while avoiding uncertainty.
Here’s a short story of how innovation dies inside established organizations that have a short-term results focus…
Over a year ago my team and I built a sales chatbot for a large automotive group; their first dealership was Hyundai. The CEO at the time was someone with a lot of experience in the industry, was known for being a great manager; managed and led for both the now and the future. We presented the idea to the Board of the group, planned on starting with one dealership and then implementing it across all their different brand dealerships.
We made a deal, and he was championing the idea within the group, and the dealership. But he left the company a few weeks before the launch of the chatbot, passing the Director reigns to his Sales Manager.
As soon as I knew of the change in leadership, I immediately thought to myself: our chatbot and plans are doomed.
Why? Because this Sales Manager was known for being demanding in hitting numbers. Was short-term focused, and wasn’t truly onboard from the beginning of the project. The reason: rather invest in what already works than on something that might not work.
Creating a chatbot is hard, it takes time for it to truly show any level of perceived “intelligence”. If you understand how machine learning works then you know that to develop any sort of “intelligence” takes time; you have to capture information, clean and label it for a dataset used to teach an algorithm to understand words and sentences. It was all explained at the beginning of the project, and they where on board with the development.
Still, she wanted the process to move faster and had made up her mind that “it should be smart from the beginning”. Still, we implemented the chatbot for 9 months generating immediate and impactful results for the dealership; but we never got paid and I decided to cut ties.
This last CEO has since been fired.
The above story is very simple and is the norm, not the exception. So, what are the lessons for you?
Beware of the enemies of innovation
Innovation has many enemies, two of them are hubris and short-term focus. The latter is what kills most any new ideas before they start, choosing to over analyze and consider new ideas unworthy unless they clearly result in short-term gains.
The process of innovation is iterative. At the beginning all new ideas are ugly babies; they’re not grown up yet. You have to give them time to develop instead of immediately asking people to prove the idea will work; big mistake.
Technology is an enabler, not a cost
You have to make a concerned effort to understand technology because in the future you’re either a digital business or a dead business. Most leaders, and companies, don’t want to hear any of this. But it’s true.
As I’ve stated for some time now: the Next Economy will be driven by 10 key emerging technologies; artificial intelligence underpins them all. It’s your job to understand what this all means for the future of your business.
Protect the future, not the past
To lead innovation is to protect the future. Leaders do so by championing long-term ideas that may not work, doing smart experiments to de-risk the project. Understanding that staying in their lane is more risky than branching out to try something new.
Established organizations have many innovation challenges to overcome, solving them is no easy task. But they have to identify and eliminate them if they have any aspiration to transform themselves.