When Netflix CEO Reed Hastings decided to bet on an emerging trend called streaming media, he planned to do so at the cost of the company’s DVD business. In his words, he wanted to step on the brakes with the DVD business while stepping on the gas with the streaming business. At the time, he faced tremendous pressure and opposition from his board. Considering other now-defunct players in the space like Blockbuster, in hindsight, it is now clear that although this was a tremendously difficult decision that required boldness, it turned out to be the right call. This is the message Rowan Gibson is taking to companies across the world, showing them how they must courageously innovate to avoid disruption and extinction in the hyper-competitive market they exist in today.
What Is Innovation?
“Innovation is creating value by doing things differently,” says Rowan. While most organizations struggle to define innovation within the context of their operations, Rowan explains that innovation is as ancient as humanity itself. Citing the Sumerians and other ancient civilizations, he explains that innovation is not about the technology of the day but rather the boldness to try new things. Speaking about how innovation is self-perpetuating, he adds, “innovation-led change is like a change bomb. When you infuse small innovations in multiple areas of your business, they result in an explosive chain of reactions leading to exponential change!”
However, what happens in organizations that are not digital first? It can be argued that companies often used to illustrate disruptive innovations are digital-first. What about businesses in perhaps construction or manufacturing? In these cases, argues Rowan, digital acts as an enabler of innovation and not necessarily the innovation itself. For instance, automotive companies like BMW, Ford, and Mercedes are leveraging digital technologies to innovate and disrupt the automotive industry. Interesting outcomes of these experiments include smart cars, electric cars, autonomous cars and so on.
Creativity, Courage, and Connections
“Caterpillar is in the business of selling iron,” remarks Rowan, “yet they are one of the most digitally innovative companies in the world.” Airbus, a dominant player in the aviation industry, has made a huge bet on digital by installing a digital-first innovation outpost in Silicon Valley tasked with disrupting Airbus itself and the aviation industry. Netflix cannibalized its DVD business in favor of its streaming business. Steve Jobs killed the iPod by releasing the iPhone. Rowan sees certain trends in all these stories that point to three clear ingredients for success in innovation. “Each of these companies demonstrated creativity, connections and most importantly, courage, in executing their innovation agenda,” says Rowan.
For innovation to take place, creativity is a must, but it is not the most important ingredient, Rowan highlights. For organizations to innovate effectively and consistently, they must understand the connections between disparate pieces of information as well as their organizational units and then figure out how to optimize these connections. However, when connections are formed, and brilliant ideas hatched, organizations and their leaders must be courageous enough to take their ideas to market. In the case of Caterpillar, Airbus, Netflix, and Apple, they each had to have courageous leaders bold enough to make big bets on their ideas. To achieve success, leaders and senior executives must adopt what Rowan calls the four lenses of digital innovation.
The Four Lenses of Digital Innovation
Many organizations shy away from innovation because they feel they lack the resources of Apple or Google or leadership in the form of visionaries like Amazon’s Jeff Bezos or Microsoft’s Satya Nadella. Rowan disagrees. “Innovation is more about a set of processes than the number of resources at hand,” Rowan says. “If you look at all these massive companies, they all started as startups in garages, on kitchen tables, and other odd places and had no resources to do the massive things they are doing today,” Rowan adds. When it comes to innovation, the innovation expert explains, approaching innovation challenges through a set of rules is more important. This set of rules is what he has christened the four lenses of digital innovation.
These four lenses are:
- Challenge orthodoxies
- Harness trends
- Leverage resources
- Understand needs
Orthodoxies are how things have always been done, he says. Challenging them is the first step towards innovation. Next, harness trends that start off as ripples but soon become tsunamis. Third, leverage existing resources in new and more effective ways. Lastly, leverage digital assets to understand customer needs better. This solutionary approach will often give rise to new and innovative ways of meeting market needs. “Integrating these four lenses courageously and consistently into the entire breadth of your organization is how you turn a 100-year old company into a red-hot disruptive ‘startup’,” concludes Rowan.
Rowan Gibson has been called Mr. Innovator, and the Innovation Grandmaster for his role in bringing innovation to companies across the world. Rowan has been the keynote speaker in numerous innovation summits across the world and has worked with Fortune 500 companies like Caterpillar, Apple, Coca-Cola among others to engender an innovation culture. Join Rowan in an exclusive and interactive one-hour webinar as he delves deeper into the four lenses of digital innovation and how they can turn stagnating organizations into fast-growing market leaders.