Grab a coffee, switch off the phones, sit back and let me ask you this one simple question. What poses the greatest challenge to your business in the next year?
No, it’s not a trick question and there is no single answer. But whatever answer you come up with and how you then tackle the challenge could have a profound effect on the profitability of your organisation not only over the next year but also far into the future. And as the organisation evolves and markets change it is a question, which should be posed by the CEO and leadership team on a regular basis. It’s also a question, which ‘The Conference Board’ poses to businesses across the world.
The Conference Board survey for 2013 reflects some interesting changes in the way in which businesses are viewing themselves. In particular the report reveals that “respondents appear somewhat less concerned than participants in previous years about external factors in the business environment” and are now “taking a hard look at their own organizations and focusing on people-driven strategies.” Globally this move now puts human capital, operational excellence and innovation in the top three positions ahead of areas such as global risk and regulation.
This survey backs up other reports, which increasingly mark out innovation culture as one of, if not the, top driver of growth. One of the interesting aspects of innovation culture is that it doesn’t require every process to be changed but it does mean trying to do everything exceptionally well. With innovation being a by-product of being exceptional, instilling an innovation culture within an organisation effectively meets the two top challenges of operational excellence and innovation.
The survey also highlights the way in which despite our being in a global economy, we do not have a global view on the relative merits of the challenges and their remedies. So, when it comes to meeting the operational excellence challenge the top European response is to break down silos followed by work on employee engagement. Asia and the USA also rank employee engagement, putting it at the top of their list whilst India ranks it second behind reducing baseline costs. However, the Chinese model is to invest in technology first with cash management in second place.
This global divergence is also reflected in the way in which the innovation challenge is viewed. Europe and India make “create a culture of innovation by promoting and rewarding entrepreneurship and risk taking” their number one choice; whereas the other three regions all lead with “apply new technologies (product, process, information, etc.).” It could be that this split of responses reflects the differing views of innovation, with some believing the purpose of innovation to be solely to come up with new products whilst others believe that instilling an innovation culture can not only enable a business to come up with new products but also to stand out from the crowd in an increasingly homogenous world.
From my point of view, it was heartening to see the way in which European business leaders have embraced the concept of an innovation culture as a transformational experience. The European response also put developing innovation skills for all employees second on their list of remedies reflecting an awareness of the way in which a culture of innovation, which is embraced by all employees, can transform an organisation.
So perhaps once you’ve asked yourself the challenge question there is another question, which you should ask. Where do you want your organisation to be? If the answer is one which stands out from the crowd, which differentiates not just with new products but with service and reputation and overall excellence then take a serious look at building innovation into your organisational culture. It’s not rocket science but it is potentially game changing.
