Most companies I observe deal with hypo-innovation: a condition where there’s not enough innovation in the organization to fight the gravitational forces of maturity. However, unless you’re brand new to the marketplace, too much innovation can kill your company—often several times quicker than hypo-innovation. Usually it’s because, in their zeal to be cutting edge, companies overlook their real capability to innovate. Sometimes however, companies who innovate well suffer from arrogance and end up learning a hard—sometimes fatal—lesson in humility.
Too much innovation can literally suck the life out of a company. In cell biology, salt—which regulates the amount of water that stays in the cell—must be the right amount. This is called an isotonic environment, where the amount of salt in the cell is equal to the amount of salt outside the cell, keeping the water in the cell at a healthy level. If the environment becomes hypertonic (i.e. more salt in the environment than in the cell), water is drawn out of the cells, causing them to die. In a hyper-innovative company, its resources are drawn out of the company in the very same way, and even if some of the innovations take hold in the marketplace, the over-innovative company will eventually die. It’s a shame to witness, but sometimes success in innovation, which should build confidence, instead builds arrogance. This is easily correctible, but first requires an often brutal, cold shower of reality.
The cause of hyper-innovation is partly due to small successes, but a more insidious contributor is the praise and accolades that comes with successful innovation. For decades, the business sages have lauded the prowess of innovative companies. Giants of industry like Apple, Google, and Facebook attribute their enormous success to their ingenuity and creative culture. It’s not a ruse, this is exactly true; however, be careful with how far you extend innovation into the conclusion. At the end of the day, Google is still a search engine, and Apple still makes computers. Although they can be creative and flexible in the marketplace, their core driving force hasn’t budged.
Initial success with innovation is more a blessing than a curse; so for those in that fortunate position, your next steps are critical. Holistically, the successful innovation should be stabilized while new innovation germinates. Since the successful innovation has already proven its effectiveness, it’s now time to focus on efficiency without tampering with the functionality. Agile practitioners call this refactoring, and rule number one in refactoring is to leave the functionality alone. Unfortunately, refactoring and innovation require two completely different cultures. So from an organizational development standpoint, it’s important to shift the innovation from its creative and agile incubators to its more process-minded stabilizers. The strategic business units of the company should leverage these lateral relationships for the innovation’s maximum success. It’s best to keep these relationships lateral, as it’s very difficult to maintain two completely different cultures under the same vertical organizational structure.
To keep innovation from potentially cannibalizing your precious resources, there should be a proper balance. This balance will of course depend on your company’s current portfolio of offerings and the company’s strategy. If you have a good number of offerings that are doing well in the market, and still have upside potential for market share, then keep innovation to a minimum. Don’t innovate just for the sake of innovating when you have rising star products and services that need your best resources. If you have some real cash cows that consistently bring in revenues but don’t have much upside market share potential, and have no relationship strategy (i.e. services that are offered to customers free of charge), it’s time to put some resources in that direction. Although this is more an art than a science, some focused strategy work coupled with a point-in-time introspection on your company’s resources, can usually illuminate the right amount of innovation to pursue.
We’ve all heard that not enough innovation will send your organization the way of the dinosaurs, but being mired in a tar pit isn’t the only thing that can drive your company into extinction. Just like a gymnast who over-rotates out of balance, your company can overextend itself with too much innovation. Successful innovation is a good thing—don’t ruin it with your ignorance and/or ego.