Society is fascinated with industry disruption and the innovative startups driving it. While many believe large corporations can innovate, they are not typically seen at the front of the pack developing bold new technologies or game-changing ideas. After all, how can such well-established organizations inject exciting new ideas that can transform industries?
Startups are willing to take more risks to capture untapped markets and disrupt traditional business models for a potentially greater reward. Legacy companies have taken note, with many trying to mirror startups’ fluid hierarchies, willingness to experiment, and tolerance for failure. After spending 30+ years in large, global technology companies, I’ve seen firsthand that sustaining this culture is incredibly difficult.
It doesn’t need to be this way. There are many industry examples demonstrating that legacy companies can embrace new challenges and prove that old dogs can, in fact, learn new tricks.
Nurture a Culture of Failing Forward and Risk Taking
Winston Churchill once said, “Success is not final, failure is not fatal: it’s the courage to continue that counts.” Despite being uttered nearly a century ago, today’s entrepreneurs and corporate leaders would be wise to take these words to heart. Innovating is inherently difficult, but trying to do so with a team that’s afraid to make mistakes is practically impossible.
Building corporate fearlessness begins with courageous leadership that is willing to speak in their own voice and go against the grain. They set the tone for their entire organization, fostering risk-taking and resilience from the top down.
During my time at Lenovo, I saw firsthand what truly fearless leadership can achieve. Lenovo, a Chinese company, had the daunting task of successfully merging two disparate businesses and cultures following its 2005 acquisition of IBM’s personal computing division. Instead of the measured approach that typically follows a large-scale merger, Lenovo came out of the gates firing on all cylinders, defending its share in mature markets while simultaneously expanding into emerging ones. This aggressive start not only established Lenovo as a global technology powerhouse, but also ingrained an unmatched pride in the Lenovo team. It’s thanks to this unyielding inner belief that Lenovo continues to branch out into new areas and deliver industry-defining products, even amidst unprecedented competition.
Don’t Innovate for Innovation’s Sake
Innovation and disruption have become even more important for businesses in recent years. According to McKinsey, as many as 84% of executives cite innovation as critical for their organizations’ long-term success. However, an ill-conceived product or service can have a profoundly counterproductive effect, resulting in loss of productivity, market share erosion, and in some cases, total business failure.
So how can companies strike the balance between being fearless and delivering successful innovations? It comes down to avoiding innovation for innovation’s sake and ensuring all efforts play to the organization’s strengths and support its long-term strategy.
Target CEO Brian Cornell said it best during a Fortune Magazine panel discussion where he described his innovation focus, “Innovation has to first start with ‘what is our guest expecting from Target’ and ‘how does it help our core enterprise.’”
Game-changing ideas don’t have to be big. Most organizations would benefit from going back to basics and innovating in the areas that will yield real benefits to consumers – say, improving the performance of existing products or enhancing the service delivery experience.
These incremental innovations may not make the top headlines, but they will often have the biggest impact to a company’s bottom line.
Blaze Your Own Trail
Thinking like a startup can inject a spark of creative energy into any team; after all, imitation is how we learn as humans. However, for large companies looking to rediscover their innovative DNA, blindly copying the culture or mentality of a high-profile unicorn can lead to frustration.
Instead, legacy organizations should focus on their unique points of differentiation and build their innovation strategies from there.
When I was at Dell, I witnessed how the company embraced innovation to transform itself. By eliminating the traditional multi-tiered sales and distribution model – cutting out the middleman – to sell PCs directly to consumers at lower prices, Dell successfully increased its annual revenue from $5.3 billion in 1996 to roughly $50 billion in 2005. By forging its own path and daring to set itself apart from the competition, Dell established itself as the world’s largest PC manufacturer, forever changing the industry.
Such an approach is easier said than done, but when executed properly, allows organizations to focus their energies on innovations that matter the most for their business.
Innovation is not a linear process; it’s a winding road filled equally with risk and opportunity. With courageous leadership and an open mind to new ideas, legacy companies too can be industry innovators.
Chris Askew is Chief Operating Officer for Cinch Home Services, responsible for the management of the company’s state-of-the-art customer service centers, nationwide service technician network, corporate IT strategy, operations & development, and a host of other related functions. Over his 20-year career, Chris has cultivated a tech-driven and innovation-forward approach across various executive roles at global technology companies like Best Buy, Lenovo, Dell, Compaq and NCR Corporation.