Companies once on top of their game can end up at the bottom of the competitive pile. Businesses can learn from them, and the lesson usually points to lack of innovation.
— By Dave DeSouza
Defining the word “innovation” is not difficult, but its true meaning is elusive. That is what some of Canada’s pioneering technology firms have learned. One company is BlackBerry (formerly Research in Motion), now trying to play catch-up and struggling to survive competition. Nortel is now a shell of a bankrupt company, despite once employing over 94,000 people globally. The first point taken from these experiences is that innovation requires nurturing, even if the company started by roaring out of the gate as a technology leader.
Many businesses seem to be excellent at developing technology but have trouble developing and maintaining an innovative culture in a rapidly changing marketplace. The second point taken away from BlackBerry and Nortel, and all the other struggling technology companies, is that being an innovator is not in and of itself enough for long-term success. Technology is advancing at the speed of light, so yesterday’s inventions are quickly history. Relying on original inventions to sustain a company is a formula for falling behind, turning innovators into rote manufacturers and marketers.
Entrepreneurial good ideas are not enough. Competitive upstarts are diligently working at home desks to develop the next great invention based on the needs of consumers. Why does it seem so often that lone individuals understand market needs better than companies with large marketing research departments? How can a multimillion- dollar corporation fail to understand that the competition is hungry, aggressive and no longer dependent on traditional business models?
Hindsight is 20/20. Each struggling and failed company cites different reasons, but their problems seem to have an overriding theme: lack of an innovative culture to sustain creative thinking. Initial success with original technology and a few minor changes along the way led to head-to-head competition with companies always looking for the next good idea and competitors ready to develop and expand on the very technology that the upstarts introduce.
Canada has always been an early technology innovator. Nortel was on everyone’s lips in the late 1990s because the company led in internet communications systems. The collapse was swift when the year 2000 witnessed a company that bet too heavily on market demand for optical equipment and found itself competing in a glutted market. It had also gone on a spending spree, acquiring smaller technology companies with abandon and had no ideas in the pipeline when the telecommunications boom swiftly ended, turning profitable acquisitions into cash drains. Nortel’s approach seemed to assume nothing would ever change.
BlackBerry is not down and out, but it is struggling. This is a pioneer company that developed wireless email and was instrumental in the development of the smartphone. It is also a company that continued to rely on its old technology while Apple was developing the iPad for consumer use. BlackBerry was sticking with its old design and modest improvements, while Apple and Microsoft were developing new enterprise and consumer based technologies. BlackBerry went on the defensive instead of offensive, and engineers began simplifying products for marketing purposes rather than focusing on developing the next innovation. BlackBerry phones lost its appeal in the technologically sophisticated marketplace, experienced security issues, and had trouble initiating updates. The company that began by relentlessly pursuing innovation found itself holding phones with fixed plastic keys and an aging operating system as the sleek iPhone was introduced, turning the keyboard into software.
The one feature struggling technology companies seem to have is the absence of a culture of innovation. A good idea is not enough. There must be conditions ripe for promoting innovation at every level of the company, from the sole employee to the CEO. There is no doubt that Nortel and BlackBerry’s staff had good ideas as to how to take the company to the next level. But, did they have a communication outlet? Developing a culture of innovation is challenging because it requires giving people the tools they need to express creativity and then having a corporate system that accepts, filters and promotes innovation.
Don’t Settle on Playing Follow the Leader
That is not easy, as BlackBerry and Nortel (and Microsoft and ATI and all the others) have discovered. Innovation cannot be ordered. It is a creative process, and innovative companies learn to give up control. Innovation comes from letting employees, not management, lead. There are opportunities to express new ideas and approaches to fellow employees and management. For example, companywide access to a social media intranet that encourages submission of ideas that everyone can review fosters an innovation culture. The business must create a supportive environment, encourage expansive new ideas and develop methods for follow-up. This is opposed to a strategy of defending markets.
Mark Federman, Ph.D., Chief Strategist at the McLuhan Program in Culture and Technology at the University of Toronto, explains it best. Organizations that are bureaucratic, hierarchal and administratively controlled are not likely to develop an innovative culture because they are locked in industrial-age business models.
In the age of knowledge, a knowledge gap is defined by the extent to which people can disseminate their ideas. Innovative companies multiply minds by enabling people to give away creative ideas within a business social network. In companies with silos, ideas and knowledge are not shared. They rise up through the silos without input from the people working closest with the stakeholders. People intent on taking credit for their ideas are less likely to freely share them; therefore, encouraging innovation is better served by creating an environment in which credit is given and ideas, built by a network of interactions, are rewarded.
Companies that want long-term success have to realize that the people entering the workplace are not familiar with environments where they are unable to share ideas and connect via technology. There is no doubt that Canadian businesses can once again assume a leadership position in technology and experience enormous economic benefits. They just need to quit defending markets, go back to spotting trends and embrace disruptive innovation.