Monday, April 25, 2022

Business Sustainability: Innovation and Culture

Growth isn't the only strategic goal for a business. How about staying in business and being robust enough to weather economic downturns and worse (pandemics, natural disasters, government collapses or regulatory obstacles such as fuel rationing, etc.)? Unfortunately, most business advice focuses on being competitive in the dimensions of Price, Quality, Delivery, Technology and Service/Customer Experience. Additionally, you might find an emphasis on hiring the best people.

However, all of those things--in their standard definitions--can be duplicated by the competition. Unless there is an extremely high barrier to entry--like an enormous capital investment. Especially there is no way to have exclusive abilities to hire the best; we all hire the best, the mediocre and the worst people available in our labor pool. So then the advice turns to becoming the most efficient and effective through our systems. Likewise, this is a strategy of false hope. There are no unique systems or the uniqueness in the execution of those systems. All of these strategies are trying to make each part of our business processes scalable for growth.

But what if the aspect of your business that created its success is not scalable? Like a chef with a unique vision of flavor subtleties, your business might have a secret ingredient that can't be duplicated throughout a larger organization, multiple sites or longer supply chains or subcontracted services. 

Instead of competing on execution, we then need to compete on innovation, such as agility, high-mix and low-volume offerings and deep market relationships with current customers and potential customers. We adapt our proposals depending on our customers' priorities--and each segment have different priorities. We have developed processes for hearing and discerning our customer preferences and quickly routing their "order" through a procedure that identifies the "exceptions". 

It helps if you have developed a culture of mutual respect, collaboration and engagement--based on mutual trust. This internal, high level of service allows your organization to excellently serve a variety of customers in an agile manner. Since 75% of employees feel disengaged, don't know what their business is really trying to do and how they contribute to it, you could create a real advantage here.

But can you scale innovation and the values for your flourishing culture? I think this is the real trick. And if it's the non-negotiable for being in business, it will determine: 

  • how you hire, onboard, develop and promote employees, and doesn't require that you only hire maestros and that the maestros learn to play as part of a symphony instead of insisting on solo acts and the supporting musicians become more competent so that the whole symphony sounds good
  • what markets you seek (i.e. the ones that prize innovation and closeness),
  • quick adjustments to products and services for evolving/revolving market needs 
  • accountability for inter-departmental cooperation, and expected compromise on reallocation of resources as market opportunities arise,
  • policies/processes/procedures that are quickly amended when better methods are discovered, 
  • discussions that focus on issues and not personalities
  • a fairness test for dealing with perceptions of tardiness, laziness, autocratic rule, failure, vocational weakness, wrong fit, and so on 
  • the expectations and standards but not necessarily the exact musical score for meeting the standards allowing for discretion--a bit of jazz--on the part of front-line experts to best meet the company's and customer's needs.
Even providing this analysis might have you assume I'm prescribing a formula for success. I know better. Business success is like gardening. You execute the elements and yet there're still external forces and a bit of mystery as to what you achieve: crops:weeds ratio, yield, etc. Business is not carpentry in which you follow the plan and achieve what you set out to build. We cannot control the sunlight, rainfall, pests and so on--though we might try using a greenhouse analogy--just as we cannot control regulatory changes, competitor dynamics, customer fickleness, etc. So we do the best to stay innovative and maintain our values with our internal and external interactions. And hope the market gods bless us with staying in business and perhaps growing until we can't.

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