Startup: Innovation and the Opportunity of Change
Start-Up! is weekly column on entrepreneurship, start-ups, technology and innovation, powered by the Adams Hub for Innovation.
Management guru Peter Drucker’s book, Innovation and Entrepreneurship, is a timeless and powerful tool for us to examine innovation. In his book he posed the question: “how do we link the science of management with the art and creativity of innovation?” He suggests we should view change as an opportunity, not a threat. The world and its needs are constantly changing. Change provides businesses an opportunity to exploit untapped needs to serve customers.
Businesses also need to recognize when changing needs make their current product or service unneeded. By taking this approach, businesses don’t see innovation as risk, but as a requirement of the way we do business. The premise being, if a business fails to change, it dies. Drucker suggests that most of what happens in successful innovations is not the happy occurrence of a “blinding flash of insight” but, rather, the careful implementation of an unspectacular but systematic management discipline. This discipline, Drucker calls Systematic Innovation.
The overwhelming majority of successful innovations exploit change. A business or entrepreneur’s task is to systematically examine the changes around them and identify those that offer entrepreneurial opportunities. To facilitate this, Drucker identifies sources for innovative opportunity; the first two sources are the unexpected success and the unexpected failure.
It is never comfortable for us to face the unexpected. A primary function of running a business or being an entrepreneur is planning. We have strategic plans and operational plans and tactical plans. If we think our plans are uncertain, we do contingency planning. With all the time and resources allocated to planning, it is often difficult to admit our plans were wrong.
The unexpected success is not just an opportunity for innovation; it demands innovation. It forces us to ask, "What basic changes are now appropriate for this company in the way it defines its business? Its technology? Its markets?"
When faced with unexpected success we need to ask ourselves the following four questions:
- What would it mean to us if we exploited it?
- Where would it lead us?
- What would we have to do to convert it into an opportunity?
- How do we go about it?
Unlike successes, failures cannot be rejected, and they rarely go unnoticed. But they are seldom seen as symptoms of opportunity. Yet if something fails despite being carefully planned, carefully designed, and conscientiously executed, that failure often suggests underlying change — and with it, opportunity. Drucker suggests the assumptions on which a product or service, its design, or its marketing strategy were based may no longer fit reality. Perhaps customers have changed their values and perceptions. Or perhaps, what has always been one market or one product use is now splitting itself into two or more, with each demanding something quite different. Any change like this is an opportunity for innovation.
The unexpected failure demands that you go out, look around, and listen. Failure should always be considered a symptom of an innovative opportunity.
Roger von Oech, author of A Whack on the Side of the Head: How You Can Be More Creative, tells us we must be jolted out of our preconceived notions and certainties and seek the fertile source of innovation. It’s not necessary to understand why reality has changed. Instead, convert the unexpected, whether success or failure, into an opportunity for effective and purposeful innovation.
So the take away lesson is to watch for the unexpected. It is the first step to innovation. Which can lead to greater success.
Dr. Robert Whitcomb is an Instructor of Business, Management and Marketing at Western Nevada College. His contact information is robert.whitcomb@wnc.edu, phone 775-445-4269