Organizations need to continually reinvent themselves but often don’t have a clear strategy on how to do this. This article will introduce you to four elements that you can include in your innovation and reinvention strategy.
How often do organizations need to reinvent themselves?
Half a century ago the life expectancy of a firm in the Fortune 500 was around seventy-five years. Ten years ago this was reduced to 15 years and is even less today.
The retail and restaurant industries have been particularly hard hit with them facing the Amazon juggernaut and now the Covid-19 pandemic. Here are some notable examples of retailers and restaurants that have filed for bankruptcy this year – Papyrus, Kroger, Earth Fare, Pier 1, Art van Furniture, Modell’s Sporting Goods, True Religion, J.Crew, Stage Stores, Garden Fresh Restaurants, JCPenney, Tuesday Morning, GNC, Chuck E. Cheese, Lucky Brand Jeans, Brooks Brothers, The Paper Store, Ascena Retail, California Pizza Kitchen, Men’s Wearhouse, Çentury 21, Sizzler and many more.
So the question isn’t “should companies reinvent themselves?” but how do they do it?
How do companies reinvent themselves?
The Board of Innovation wrote an article titled “7 challenges innovation managers face in 2020” and found that the number one challenge was “Innovation initiatives with no innovation strategy”.
Innovation, and reinvention, is difficult and here are four elements that you can consider including as part of your strategy.
It is clear that purpose is vital for both individuals and organizations. The benefits of purpose, and being purpose driven, have been extensively analyzed
Leaders on Purpose produce an annual report titled “Purpose-driven Leadership for the 21st Century” which you can download for free from their website. (Incidentally the new 2020 report is going to be released on November 21). In the report they define purpose, ‘the ambition to create value by contributing to the welfare of society.’ During the introduction it also state “Purpose pays, but it isn’t easy. While an increasing number of organizations are finding new ways to align purpose with profits, there is no one-size-fits-all solution.
Many leaders are learning how to resolve the tension between short-term financial pressures and long-term purpose.
Purpose has been shown to be vital in underpinning a reinvention strategy as well as an important driver in fostering an innovative culture within an organisation. OpenExO and Singularity University took this further and created a concept called the Massive Transformative Purpose (MTP) that tied purpose to being hugely aspirational, inspiring and able to change the world. When your organisation’s MTP is discovered then it can act as the North Star for your reinvention efforts.
Individual purpose is also vital and Oxford Leadership have created a Self-Managed Leadership program where employees can determine their purpose. Purpose can be used to get the right people on the bus, in the right seats and then have the drive to excel (Jim Collins – “Good to Great”).
Does purpose have a place during the pandemic? Nell Derick Debevoise wrote in her introduction to a Forbes article titled “Why Purpose-Driven Businesses Are Faring Better In Covid-19” that:
“A lot of businesses are thriving in spite of the major challenges presented by the Covid-19 pandemic. The common thread among companies that are weathering the storm most successfully is an authentic and integrated commitment to purpose larger than profitability or growth. Indeed, in the last financial crisis, certified B Corps were 63% more likely to survive than other businesses of similar size.”
Nell, and many others, are finding that the COVID crisis is making organisations look at purpose and are using it as way to galvanize them and their staff to come through the pandemic – and often stronger.
2. Exponential Innovation
The world and technology is changing so rapidly that it is not enough just to innovate but to have a roadmap that intersects with the advancements of exponential technology.
It is for this reason that at Idea Storm we have been tracking exponential technology and have a full section of our website dedicated to it – http://bit.ly/ExOTech. In this section you can find a full presentation and table of news stories since October 2019, monthly exponential technology summaries, industry primers and hundreds of videos.
Peter Diamandis put together a list of 6 D’s of exponential technology disruption: Digitized, Deceptive, Disrupts, Dematerialization, Demonetization and Democratization.
The process of determining Exponential Innovation is to take a list of exponential technologies, map the 6 D’s against them for your industry and then use Moore’s Law to map out where they will be in the future. You can use this as a guide when putting together your innovation strategy.
It is said that this is the process that Elon Musk uses to drive their innovation efforts that will then intersect with the growth of exponential technologies.
3. Innovation Leadership
The definition of innovation leadership according to Wikipedia is “… a philosophy and technique that combines different leadership styles to influence employees to produce creative ideas, products and services. The key role in the practice of innovation leadership is the innovation leader.”.
Innovation, and reinvention, are difficult and require a culture of innovation to be embedded within the DNA of an organisation. It also requires tenacity and bravery of an organisation to continually believe in innovation and reinvention.
“… you’re still going to get it wrong nine times out of ten. We all know that if you swing for the fences, you’re going to strike out a lot, but you’re also going to hit some home runs.”
– Jeff Bezos
The Innovation leader, the CEO or other C-level executive, needs to have a high risk tolerance, have domain expertise, be open to new ideas, have strong emotional stability, have confidence in their ability to succeed, be action orientated, be collaborative, like to play and is a keen observer paying attention to details. This is quite a list!
4. Exponential Leadership
The term exponential leader is a new term that describes the makeup of today’s leader. This type of leader has similar qualities to an innovation leader but they are extended to all areas of the organisation.
Common traits in an exponential leader is that they have a large vision beyond themselves (the MTP described in Purpose), they are generous, they have strong values and they create more exponential leaders.
“Exponential leadership happens at the nexus of great vision and great management. It’s not just about supporting your teams and giving marching orders. Exponential leaders share their vision, inspiring their people and the world around them, while empowering their talent to utilize and develop their own expertise.
Innovation happens when strong leaders shine a light down a new path and enable their teams – equipped with the right tools, support, and confidence – to traverse, define, and improve it.” – What Kind of Exponential Leader Are You?
Can an organization last forever?
I would like to end this article by asking the question above. Yes – It is possible, but it needs to be in a constant state of reinvention.
Jeff Bezos wrote in his 2016 Amazon letter to shareholders:
“Jeff, what does Day 2 look like?”
That’s a question I just got at our most recent all-hands meeting. I’ve been reminding people that it’s Day 1 for a couple of decades. I work in an Amazon building named Day 1, and when I moved buildings, I took the name with me. I spend time thinking about this topic.
“Day 2 is stasis. Followed by irrelevance. Followed by excruciating, painful decline. Followed by death. And that is why it is always Day 1.”
It takes a relentless commitment to keeping an organization as a start-up, regardless of its size, and always remain in a Day 1 state – always reinventing itself.
Additional Resource: 6 successful methods for brainstorming & idea creation (2020 Update)