Life is busy. I know. I get it. That said, if you want your business to be sustainable and lead your industry, you have to make time for innovation. Yes, it is hard, but if it were easy, everyone would be doing it! What are some key indicators that it is time to bring innovation to the top of the priority list? Here are the top six.
- Growth has stalled
If your revenue is stagnant or declining and you are seeing long term customers walk away, take a good objective look at why that is? When is the last time you introduced a new product or service? Is what you’ve been offering still filling a need? Are your internal systems holding you back from growing? Are your employees still proud to work on or sell your product or service, or do they see it as ‘mature’ and in decline?
If you are not growing, it’s time to innovate.
- Falling behind the industry
Has your position as ‘industry leader’ been taken over by a competitor? Is the industry leveraging new technologies and systems that you’ve avoided adopting? Are they able to respond faster and better to clients, customers, and employees? Look, I can appreciate there are ebbs and flows in the market. If, however, your sales, margins or other key metrics are down more than your competitors, you need to be honest about why. Even if you are growing at 10% per year, you may be falling behind if the rest of the industry is able to grow at 30%.
If your competitors are consistently winning where you are not, waiting to innovate is not an option.
- Competing on price
The truth is that no one wins long term if all you are competing on is price. Discounting your product or service on an ongoing basis or having to pay staff significantly more than market rates suggests that people aren’t seeing value in the product, service, or employment opportunity you are providing. You can’t sustain your business if you are killing your margins.
You need to innovate so people see such value in your offering (meaningfully unique) that they are willing to pay more for your product or service, or feel excited about that job opportunity at the market rate.
- Results are off track
Beyond just sales growth dropping off, other key performance indicators may be telling you that it’s time to innovate. Decreasing margins may not be about price, but could be about internal operating systems (don’t forget that internal systems are ripe for innovation too!). Other indicators that you may need to innovate include loss of innovative thinkers in your organizations through attrition, longer response times, lower than average shareholder returns, increasing costs, etc.
Some organizations leverage tools such as Lean to drive out waste and see if they get their results back. Lean is great, but it is not enough to get you back to the top. As I have said before, my grandmother learned to be the most efficient haystack builder I’ve ever seen, but the disruptive introduction of the automated baler was a game changer! Investing time, effort and money in learning how to build an even better haystack would have been a waste.
Don’t make excuses for poor results, seek to understand root cause and innovate to be the game changer.
- Turnover of key/high potential staff is increasing
If our best and brightest are leaving, we need to sit up and pay attention. Exit interview information may provide some insight into what is driving the exodus and where those folks are landing. Work buddies may also shed some light on the reasons key folk moved on. Is it that they have limited opportunities? Is it frustration with internal operations and systems? Might it be that your competitors are offering a better product or service? Again, seek to dig for root cause, not just for each individual, but signals that the issue is bigger than an individual.
If your key team players and high potentials are leaving, it may be a sign that your product, service or systems are falling behind, and innovation is required to make the organization an attractive place for employees to invest their time and talents.
- You don’t have time to innovate (because you have to run the business)
Solving that immediate customer service or operational issue may feel, in some ways, satisfying, but it’s not going to set you up for sustainable success. Focusing on firefighting today’s issues comes at the expense of future growth. Don’t get me wrong, a crisis needs to be addressed. The question is, why do you have to do it? If you do not have technology or development systems to prepare your next level leaders or employees to handle operational issues, you are limiting your growth (or getting in your own way).
If you are spending more than 50% of your day dealing with day to day ‘fires’, step back and see if there are bigger issues at play that innovation needs to address. Your long-term health, and that of your organization, may depend on it.
As a leader, your job is bigger than the day to day. Stakeholders are counting on you to set a sustainable path and pace taking them into the future. That means you need to carve out time and resources for innovation. The first step is to admit you need to do things differently, then you can find systems and support to guide you on the journey.
Education and Coaching Practice Lead