Many senior executives publicly acknowledge the need to explore new business and markets. However, company resources tend to favor past and present programs, viewing business development as a distraction even when the company’s long-term relevance is at stake. After all, during an era of corporate downsizing and global economic austerity, business leaders generally:
- Allocate financial resources to proven profit-producing core business areas, and
- Recommend cutbacks in investment for speculative innovation and unproven business ventures.
A Harvard Business School study of management from technology firms such as IBM, Hewlett Packard, LexisNexis and Cray Computers found that business success directly correlated to visionary leadership teams that embraced the old and the new to create a state of constant creativity at the top of the organization. The study found three principles that set successful companies apart from less successful ones.
- Senior team supports an overarching corporate vision that sets ambitious targets both for innovation and core business growth.
- At top levels of the organization, tension exits between innovation unit demands and core business demands.
- Leadership adopted a culture of inconsistency, allowing themselves the latitude to pursue multiple and often conflicting agendas.
The impact of corporate identity and cultural positioning within the marketplace is well known. Yet companies mistakenly continue to avoid developing an overarching mission and vision to guide growth. An historic example of this is Polaroid versus Kodak.
During the 1990s, Polaroid claimed to be the world’s most advanced digital camera. Unable to see why consumers would want a camera without a hard copy image, Polaroid’s overarching identity was “a seller of film.” Polaroid went bankrupt.
Kodak’s mission, on the other hand, was to be “the leading imaging company.” This overarching mission allowed the firm to promote existing products in the ’90s while exploring new products as new technologies were developed. An international company, Kodak remains as relevant today as it was when it was founded in the 1880s.
Are you embracing paradox with an overarching vision that enables you to attend to the present while aspiring to the future?
Tension At The Top
Now more than ever before, cooperative problem-solving and cross-functional decision-making are a must for business success. With a multi-generational workforce, geographically dispersed virtual teams and rapid technology changes, c-suite leaders must accept the tension created over the competing agendas inherent in promoting existing programs and innovation.
This tension often requires leaders to compensate business units on total company performance, rather than basing rewards only on profit and loss.
Dual focus on the current marketplace and long-term growth involves company-wide collaboration, a commitment to transparency and communication, and leaders capable of navigating interpersonal dynamics associated with flexible time frames and and productivity goals.
Is your company embracing paradox with direct access to the CEO, c-suite involvement in innovation and a clear direction for integration and collaboration between core business and business innovation?
Adopt A Culture of Inconsistency and Diversity
Consider the newspaper industry. For the past decade, the marketplace has shifted from buying subscription hard copy news to consuming news online. As this trend emerged, publishing companies had to invest large sums developing digital news that directly competed with business efforts to maintain profits in its newspaper products.
Publishing houses with inflexible business practices went bankrupt or out of business. But organizations like USA Today survived and even thrived by diverting from a company wide one-policy-fits-all attitude and implementing diverse policies and performance metrics based upon departmental needs and diverse employee talent.
CEO Tom Curley created two fundamentally contrasting units, physically and culturally distinct, that reported directly to him. His ability to promote competing units with diverse operational strategies resulted a financially-solvent company that met the current needs of the marketplace while adapting to the rapidly changing consumer behaviors of news consumption.
Is innovation part of your company’s strategy? How are innovative efforts rewarded? Does your leadership embrace paradox by shifting financial investments and/or employee talent between existing revenue streams and developing new revenue streams?
We’d love to hear from you. In the comment section below, tell us know how your company infuses its history, the present and projections for the future in its plans for long-term success.