Corporate Paradigm Shift: Breaking Through 3 Barriers to Innovation
Executive Summary Change is the name of the game in business today. Corporate survival involves more than getting used to change. Visionary executives (I call them Visexecutaries) embrace change and harness the creative genius of their people to seize emerging opportunities. Overcoming barriers to innovation involves a change in mindset and recognizing when conventional wisdom no longer applies. We may not like it. (I know I don't.) We can learn important lessons from changes in the music and photography industries and companies to watch like 3M and SC Johnson that use constant innovation to generate new streams of revenue from Post-it Flags and Ziploc bags. Malaysia's Digi provides a model for promotional and product innovation geared to the youth market.Part 2: Corporate Paradigm Shift: Breaking Down 3 More Barriers to Corporate Innovation examines lessons from companies to watch Royal Selangor from Malaysia, Batelco from Bahrain, and Saudi Arabia's Hyperpanda.
6 Barriers to Innovation
There are many barriers that can prevent organizations from embracing change, however, I’m going to focus on the 6 that I see most often in my consulting work with organizations. They represent outdated paradigms and stand in the way of innovation and success. Breaking through each of them requires a change in mindset.
- The "That’s Not How we Do it Here" Syndrome
- The "Not Invented Here" Syndrome
- New Knowledge is King
- Theory is the Answer
- Majority Rules
- The Customer is Always Right
We'll focus on the first 3 today and discuss the rest some other time.
The "That’s Not How we Do it Here" Syndrome
In a turbulent economy, when the rules are constantly changing, innovation is often stifled with the words "That’s not how we do it here". As a result, many organizations fail to spot trends in their marketplace. Some don't adapt until they have lost significant market share and allowed competitors to make deep in-roads. Others never adapt until they go out of business.
Lessons from the Music Industry
Remember this?
Photo Credit: The 60s Official Site
If you don't, it's evidence of just how quickly things change. Not that long ago, it was a common item in just about every household in North America. If you remember it, you've witnessed dramatic shifts in the music industry. You've seen the transition from 45s and 33 1/3 LP records to cassettes to CDS to Itunes. You've gone from listening to music on transistor radios to Walkman's to CD players to IPODs. Companies in the music industry that have made the transition are still around. The others, we barely remember.
Lessons from the Photography Industry
It took Kodak and Polaroid time to realize the impact of new developments in their market. They were slow to perceive the opportunities that digital cameras presented and adapt to the new technology. For a while, both companies got stuck in the "that's not how we do it here" syndrome and failed to embrace the new of doing things. Eventually, Polaroid made the transition to serve the niche TV, commercial and film markets. Kodak has formed an alliance with Wal-Mart to develop photo CDs. It will be interesting to see Kodak and the new Polaroid continue to re-invent themselves.
The "Not Invented Here" Syndrome
In a turbulent economy, influences are no longer just local. They're global. We've seen the global impact of H1N1 and many natural disasters yet we fail to connect the dots to business. In the same way that diseases and disasters can send shockwaves around the globe, new strategies and breakthroughs sometimes come from other industries. Models of innovation often come from unexpected sources including other countries, sports, your personal life, even your children, and ESPECIALLY your teenagers.
Here are examples of how Batelco in Bahrain and Digi in Malaysia have targeted the youth segment in their wireless communications product offerings and marketing.
Interview with Batleco's Muna Al Hashimi, General Manager of consumer division
Muna speaks about social media integration and innovative services for the youth market segment.
Please take note of an excellent example of youth oriented advertising from Batelco:
Company to Watch: Digi - DiGi Telecommunications Sdn Bhd (Malaysia) @Digi_Telco
I have had the pleasure of having delegates from DiGi Telecommunications Sdn Bhd attend my sessions in Kuala Lumpur since 2001.
Digi has had a focus on the youth market with very edgy youth oriented campaigns from before I was even aware of the company. This focus continues today with its "Yellow Invasion" campaign that interestingly enough even integrates Lesley Gore's 1963 American hit "I will Follow Him". Definitely, Digi is definitely not stuck in the "Not Invented Here" or "New Knowledge is King" syndromes. Please notice the full social media integration on Digi's website.
Youth market vital for DiGi (2009)
DiGi Telecom Unveils New Brand Positioning (2001 Digi Press Release)
By contrast, I have noticed Canadian wireless communications firms have started to offer youth oriented campaigns only relatively recently.
We need to pay attention. Focusing strictly on what happens “here” in our company, profession, industry, or country is tunnel vision and it will result in missed opportunities. For example, teens are text messaging like crazy yet how many companies targeting the teenage market have begun to use what is their preferred method of communication to reach them? How many wireless communications firms are selling text message ad space as an additional source of revenue? I have access to a teenager who is a power text messager ;) and he rarely encounters them. If you know of examples, please post them in the comments.Lessons from Asia
Examples of technology and services I saw in Asia long before they turned up in Toronto.
- Jumbotron screens on top of high rises - Singapore and Kuala Lumpur, Malaysia
- USB drives - Kuala Lumpur, Malaysia
- Tiny cell phones in a range of colours - Malaysia
- Cellular telephone advertising targeted at teenagers - Malaysia
- Internet Cafes - Singapore
- Manicure parlours and Salons - Malaysia
- Video games on cell phones - Tokyo
- Cans that keep cold drinks cold and hot drinks hot - Japan
- Vending Machines just about everywhere for just about everything - Japan
These represented business opportunities in North America for savvy entrepreneurs. Some of these innovations are still not widely used in North America.
That's why companies that completely cancel foreign incentives and retreats or spend their time lying on the beach and at the bar are very short-sighted. They miss out on a golden opportunity to scope out what's going on in other countries, scan the horizon to see what’s coming, and identify innovations that they can introduce back home. These trips may need to be scaled back in some instances but using a part of them to familiarize top performers with a business practices in other countries, may be a more fruitful course of action.
Update: December 18, 2009
Some North American companies are finally learning from the Japanese and using vending machines to sell products other than beverages and snack items. Today, for the first time, I saw a Mark's Express vending machine selling Mark's Work Warehouse products at the Union Station Go Bus Terminal. I didn't notice it when I was there last week. Vending Machines with Ipod's, Vivatar and Canon cameras are now starting to pop up at airports and in Macy's stores in the USA.
Photo Credit: avatar28
Trends develop and travel just as easily from East to West as they do from West to East. By taking the time to monitor developments in the North American market, Asian, European and Middle Eastern companies can see the shape of things to come and make adjustments early. Here are some examples from recent headlines of how this applies to wireless communications, plastic bag manufacturers, and pharmaceutical companies.
Wireless Communications:
Ontario Follows Suit in Cell Phone Ban Legislation
Pharmaceutical Industry:
In some jurisdictions, pharmaceutical sale representatives are no longer permitted to take doctors out to lunch:
Vermont: No More Free Lunch?
Responding to this development, rather than waiting for similar legislation to be enacted in more jurisdictions, some pharmaceutical companies voluntarily signed the PHARMA Code on Interacting with Healthcare Professionals that took effect in January, 2009. This was a good way to overcome the not invented here syndrome.
Being aware of what is happening "over there" and responding proactively can lead to the creation of new businesses and the identification of new streams of revenue for existing businesses. At least one firm, has recognized the business opportunity in the new pharmaceutical legislation and codes. They've launched:
Restaurants and caterers in other areas who have been hit by a decline in revenue from the new legislation and the code (and in the number of meeting and corporate events in general) may be able to apply this model or open a franchise in their local market.
New Knowledge is King
By now some of you are probably thinking, tell us something we don't know. This bring us to our 3rd barrier to innovation, thinking that new knowledge is king. Innovation often comes from using the familiar in new ways. We've all heard the expression:
"It’s not what you know it’s what you DO with what you know that counts."
Lessons from Post-it Notes
Company to Watch: 3M @postitproducts
We've all heard the story about the invention of the post-it note until we can repeat it in our sleep. Before you roll your eyes, do we really know the full story?
Have you seen what 3M is doing with Post-it Notes now?
By making them bigger, smaller, using different shapes, a variety of colours, and now creating digital versions of the Post it-note, 3M innovation continues to work its magic and transform this 1 product into a seemingly endless stream of revenue. (Please take note of the social media integration with Twitter, Facebook and social bookmarking at 3Ms Post-it Products website.)
Lessons from Plastic Bag Manufacturers
Companies to Watch: Glad and SC Johnson
This approach doesn't only work for Post-it notes. It is transforming the plastic bag industry. Glad bags now come in various shapes and sizes and with a variety of fasteners. Just how much bigger can plastic bags go? What SC Johnson is doing with Ziploc blew me away.
Is it enough for companies to find new and better ways of using their products? Manufacturers of plastic bags need to be very much aware of emerging global trends that impact their market....and so do other industries:
San Francisco bans traditional plastic grocery bags
No plastic bag ban for Ontario
It's official: Manitoba town gives plastic bags the boot
In the pharmaceutical industry, the same compound can be released in different strengths and a variety of forms ranging from pill and capsule to liquid and suspension. The telecommunications industry looks for new ways to use existing technology. The same technology that was once used for voice has been modified and it now also carries data. The wireless communications industry markets essentially the same technology in different sizes, colours and with a variety of features through service bundles appealing to specific market segments.
We can also draw examples from Jamaica's reggae music industry. Long before reggae became popular on the international scene, Jamaican record producers would release a "version" of the A side track on the B side of 45 records. Sometimes it was the studio musicians and recording studio engineers who would experiment and come up with something new and creative based on the A side track. Other times, it would be a band that was not as well known across the island doing their rendition of what was on the A side. This eventually grew into an art from and created dub which has exploded internationally. There are dozens and dozens of versions of some of the more popular Jamaican rhythm tracks, ranging from dub to DJ toasting to dancehall style music. Dub music has also had a major influence on its cousins rap and hip hop.
Due to this innovative approach to creating new music from the old, reggae can now be heard in every corner of the globe. It has been used for everything from the on hold music at a luxury Mumbai hotel to the overhead head music that creates a relaxing experience for shoppers at Singapore's Orchard Road location of the Japanese department store Takashimaya. I've smiled when I've heard a the reggae version of a traditional Jamaican folk song "Brown Girl in the Ring" at the airport in Kuala Lumpur and Bob Marley playing at a coffee shoppe at Tokyo's Narita airport. This is phenomenal. When one considers that Jamaica has a populaton of only about 2.5 million, the influence of Jamaican music on the world music scene has staggering. In the same way, entrepreneurs can have an impact far beyond the size of their businesses by using the familiar in new and creative ways.
In this video, Joel Barker, the futurist and innovation pioneer who first used the term "Corporate Paradigm Shift" gives another example of how German robotics technology was applied with success to a totally different industry. It's a perfect example of what businesses can accomplish when they break through the "New Knowledge is King" barrier:
Parting Shot
There is much more to the Post-it Note story than most of us realize. This success could only have come from a company like 3M that truly embraces innovation. At 3M, innovation is a way of life. 3M takes this a lot further than other companies. It turns the “that’s not how we do it here” and "not invented here" syndromes upside down recognizing that breakthroughs don't always come from within 1 company or country. 3M actively invites the public to submit ideas for new products at their websites around the world:
3M also breaks through the new knowledge is king barrier. In their quest to discover new ways to use existing products, 3M websites solicit ideas from the general public. 3M provided a brilliant example of social media integration when it had a contest to identify new ways to use Post-it Notes and asked contestants to upload their entries to Youtube. 3M also announced the winners on Youtube.
Caution: This download was slow on my computer so I won't include the full URL until I locate a faster version. If anyone else finds it, please include the URL in the comments leaving out everything before the
www.youtube.com/postitnotes
Next Steps
How does all of this apply to your industry? Share these examples with your team and take time to do some brainstorming. Better yet, arrange a focus group. Share these examples with some of your best clients and, through brainstorming, you'll be able to come up with a range of ideas that you probably never considered.
The next time you reward your team with a trip to another country or attend a business meeting abroad, extend your trip by a day. Look around. Organize a team challenge that sends people out to scout and come back with examples of new technological developments that could be used in your market. Arrange field trips to companies in your industry and other industries. It will be time and money well spent.
There is no need to get on the plane to find models of innovation. The beauty of the Internet is that you have a look at what companies in your industry are doing around the globe. Look at press releases for the last decade. Find examples of commercials on Youtube. Monitor trends through websites like:
- Business Monitor International
- Trends in Japan
- Japan Trends
- Business Trends in Asia
- Latest Business Updates
You may just stumble across an idea or approach that will inspire you to do something innovative in your market
