A Bias Toward Paralysis - What's Impeding Corporate Innovation
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A Bias Toward Paralysis – What’s Impeding Corporate Innovation

“We need to innovate!”  A commonly heard refrain in today’s business environment.  As the pace of change quickens, traditional businesses are confronted on a daily basis by new competitors who are disrupting their previously staid and relatively comfortable marketplaces. 

Everyone knows that a “bias toward action,” is one of the ways to compete.  “Doing something is better than doing nothing.”  But that is precisely what most companies are doing today-nothing.  I call it a “Bias Toward Paralysis.”  The pace of change and the number of threats facing traditional businesses is overwhelming and it’s causing executives to become paralyzed into in-action.  Public companies face even stronger headwinds because of the financial pressures of the short-term focus of Wall Street.  In most cases, CEOs are actually rewarded more for in-action, than they are for taking chances and trying to develop a long-term innovation and growth strategy.


Examples abound.  The retail industry may be the most talked about example.  Amazon is beating the pants off most traditional retailers as they continue to innovate the shopping experience.  5 years ago, I heard retail executives say, “Well yeah it’s convenient to buy online, but our customers aren’t willing to wait a week for items to be shipped.  They want it now, so that’s how we’ll win.  Well, how has that worked out for you?  “What are you going to do when Amazon figures out how to deliver on the same day?” I would ask.  “That’s really hard to do” they would say and “I guess we’ll worry about that when the time comes,” they would reply. 

There are many other industries where this paralysis is happening as well.  TV networks trying to figure out how to compete with Netflix and Hulu, have responded largely by producing more cost effective to produce reality TV shows.  The hotel industry has responded to the Airbnb threat by trying to make the case to government regulators that it’s not a fair playing field and that Airbnb should have to abide by all the rules and regulations that hotels have to.  Not an unreasonable argument to make by the way, but unlikely to change the competitive dynamic anytime soon.

What to do?

So, what to do if you are one of those unfortunate traditional businesses?  There is hope!  But it will mean doing things differently and creating a culture of innovation that starts at the top. 

Changing the culture of a company to become more innovation focused is a steep climb for most organizations, but the risk of not doing it can and most likely will be catastrophic for your business

3 Must Do’s

Here are the 3 of the strategies that successful companies can deploy to become proactively innovative :

1.     DEVELOP AN INNOVATION LAB.  This is a fairly common approach and sounds fairly straight - forward, but here’s the problem.  Many innovation labs are staffed by people who have been with the organization in traditional roles for years and in some cases, their entire careers.  So, the strategy seems to be, “go find 10-15 smart and up and coming people in our company, get them in a room and tell them to start innovating!”  You need to have people who know the company for sure, but you also need to mix in outsiders as well who can truly bring an outside perspective.  The culture of the lab is also important.  Rewarding the appropriate balance between ideas and action, is important to get right.  All ideas and no action gets you nowhere while rushing ideas to market that end of being incremental at best is not the answer either.

2.    INTEGRATED YOUR ANALYTICS EFFORTS WITH YOUR INNOVATION EFFORTS.  Often times, the competitive advantage you have as a business that has been around awhile, is that you have a lot more data at your disposal than the start-up guys.  It can be a sizeable investment to be able to get use-able data from legacy platforms to create a seamless way to be able to start using the data for scenario modeling and predictive analytics, but worth the time and the investment.

3.    INFUSE A CULTURE OF INNOVATION THROUGHOUT THE ENTIRE ORGANIZATION.  Easier said than done.  Too many CEOs talk about how important it is to be able to innovate and then create an innovation group within the company.  But then inevitably, as Peter Michael Leadbetter, Head of Strategy at ExO Works points out in Forbes, “the corporate antibodies attack you the moment you try to innovate.”  Innovation is not a project, it’s a transformative journey and culture that is created and led by the CEO and senior team.

Who’s getting it right?

There are a few good examples of companies who are getting innovation right.  In retail, it’s companies like Warby Parker, CVS Health and even Amazon innovating against rivals in the music space who are more established like Apple Music and Spotify with their Amazon Prime membership that includes music, video, and Alexa!

There are a few Innovation Labs that are highly productive as well.  Probably the most famous innovation lab is Google[X} Lab.  Interestingly, the Google X lab is named for a failed project—which shows that Google knows that failure is part of the path to success. It’s been the incubator for Google’s biggest projects, including drones, Google Glass, self-driving cars, and smart home appliances. The focus of the lab is the ambitious projects that may not make it to the consumer level but will help maintain the company’s reputation for innovation. 

Sephora Lab is focused exclusively on the consumer experience.  Combining both mobile and in-store approaches, the lab has come up with Color IQ, which helps customers find the right makeup color for their needs.

Changing the culture of a company to become more innovation focused is a steep climb for most organizations, but the risk of not doing it can and most likely will be catastrophic for your business.

Dirk Defenbaugh is a growth and innovation consultant with Venn Growth Collective.  The VENN team is based upon a simple but powerful idea: effective strategies are created through the integration of financial and operational business planning and compelling consumer value propositions and creative brand positioning. This holistic approach requires a collaborative team of highly skilled experts across business strategy, customer experience design, technology and digital consulting, brand strategy and design.

About VENN Growth Collective: We help businesses grow and brands thrive. Our rigorous process integrates data-driven analysis with creative ingenuity to deliver strategies and design solutions that are emotionally compelling and operationally sound. Our offices are located in the co-working space of The IDEA FOUNDRY in the Franklinton neighborhood of Columbus. VENN works on referral to deliver scenario development, brand positioning, migration strategies, innovation competency building and facilitation services for B-to-B and B-to-C companies of all types and sizes. Recent clients include Wusthof, Gunze, Kroger, Charles Penzone, and The Ohio History Connection.



Dirk Defenbaugh