Innovation Does Not Equal Success
Innovation is no secret recipe for success in business. In fact, innovation is not the most important ingredient for success. It’s not even necessary, but merely nice to have.
In Jim Collins’ best selling book, Good to Great, he and his research team explore what enables some companies to build and sustain successful companies that outperform comparable businesses in their industries. Innovation doesn’t even make the list of ingredients for success.
What matters most for a successful company is the people. At the helm, the leader cannot be an egotist, interested primarily in exercising power and acquiring wealth. Rather, the leader must possess the humility to listen and cultivate people throughout the organization, including direct reports. In turn, the people in the company must face reality soberly, making decisions based on facts, not fiefdoms.
Once a company possesses the people and sense of teamwork and respect, they will find out what to do. And what they choose to do need not be innovative, in the sense that the innovation gurus would have you believe.
A successful company does not necessarily need to invent new technology. It needs a sensible direction, and the ability to single-mindedly execute on moving that way. If technology and innovation happen to help, the company will naturally innovate. If executing on the strategy doesn’t require any special innovation, employees and managers will not quit their jobs out of boredom. They will make the company successful by doing whatever it takes, without ego.
Consultants may come along after the fact and claim that innovation was the key to success. Walmart achieved economies of scale. Walgreens decided to open stores in convenient locations and stock what people wanted to buy. Starbucks introduced better quality coffee than gas stations and diners.
Were these great innovations? Of course not. Only those who see innovation everywhere could believe it. And only when innovation becomes a meaningless term can it bend to describe “whatever company X did to become successful.”
Startup companies are built on innovation. Most fail. Meanwhile large successful companies often lack the ability to innovate, yet many of them thrive as if they’ve never heard from the top business schools in the US that they must innovate or perish.
As technology accelerates the pace of change, innovation is worth studying. But the most successful companies may be those who ignore the topic, and instead focus on what they do best: running their business. Along the way, they’ll find whatever innovations they need.