Why Successful Companies Think Small

Mike Walsh Keynote

Today’s guest blog post was written by Mike Walsh, Founder and CEO of Tomorrow, a consumer innovation research lab. Hear him present on what it takes to lead a 21st century IT organization in his keynote address at Kaseya Connect, “Business Re-Imagined.” This post first appeared on Mike’s blog.

Why do some companies survive and others simply crumple? And stranger still – for star-crossed giants such as Yahoo, RIM and HP – why did major investments in innovation not save them from being blindsided by the future? In my view – it is all a problem of scale. Big leaders favor big solutions for big problems. But just the like the Higgs Boson, sometimes in order to understand how dramatic transformations happen, you have to start by looking for things that are very small.

Top down strategy is sexy. Wall Street gets it, your board gets it, your employees get it – and most importantly if you happen to be the top dog at work – your ego gets it. But here’s the catch. You can spend a weekend retreat thinking about blue oceans, innovator’s dilemmas, and tipping points – but come Monday, you will be faced with a real challenge. How do you get the rest of the organization to change their thinking and behavior along with you?

Resist the temptation to simply create an innovation department. Creating a new department where all the fun stuff is going to happen is like announcing to the rest of your team that their contributions are soon to become irrelevant. Trust me – politics and bureaucracy will ensue. I call this the ‘Mirror Effect’. The bigger your innovation department, the more likely it will become a microcosm for all the things you are trying to change in the first place!

Successful companies think small. They focus on the most basic particle of change in the enterprise – the project. Money people like projects. They value them by analyzing their cash flows over time. But as a change agent in your business – you should learn to love them too. They are the building blocks of how interesting ideas gain mass, and become real. More importantly, the diversity and quality of projects in a business is the best litmus test for your company’s chances of surviving the future.

Here’s a thought experiment for you. Think of it as your own personal innovation Hadron Collider. Grab a piece of paper and rule a line down the middle. Write a list of all the projects you are managing or involved in at the moment. Now place the ones that are focused on protecting your existing business practices and fighting fires on the left. And now, add any of the remaining projects that involve new ways of making money, new markets or challenges to the status quo on the right. Review your results. How much of your time is spent on defending the past as opposed to building for the future?

Of course, it is not enough just to get excited about your particles of change without thinking about what makes for a great project. From our research at Tomorrow, we have observed that great projects are defined by five important characteristics.

They are:

  • Bottom up: championed by the people closest to the customer’s pain points
  • Horizontal : supported by a cross functional team of people from different parts of the business
  • Visible: transparent and actionable by the rest of the organization
  • Quantifiable: a clearly defined payback or monetary opportunity
  • Small: nimble, focused, and targeted to a well defined problem

For me – the real question at the heart of the business transformation debate is not how much money or resources you spend on coming up with new products or ideas – but how quickly can you innovate around your innovation process.

Business leaders today are under incredible pressure to perform against the backdrop of uncertain markets, changing patterns of customer behaviour as well as disruptive technologies. Frankly that calls for an entirely new type of enterprise – one that is flexible, adaptable, and natural born for the 21st century.

So, are you ready to re-imagine the way you do business?

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