Is Your Organization Enlightened or Reckless?

Many experts would suggest that innovation is the heart of an organization. Without healthy innovation, eventually the company will cease to thrive and possibly even die. How do you know if the health of your innovation is suffering? Most likely, there will be an unfavorable manifestation in several different ways. Here are just a few possibilities:

  • Little or negative revenue growth
  • Consistently declining margins
  • Most products are defending your position

In most organizations, this indicates underlying organizational and cultural problems that will need to change to return the company to a healthy state. Similarly, if your heart isn't working properly, you change your diet, exercise habits, medications or maybe get a pacemaker. In all cases, the health issue needs to be understood, accepted, diagnosed, and resolved.

Most organizations fit into one of these four quadrants relative to its own health:  stylecolor="#c0504d" ] Graph C 

To be aware, one must first understand and accept the reality of their situation. Once acceptance is gained, there is an understanding of the shortcomings and a decision is made to take action. One has essentially reached a state of courageousness that is required before significant progress can be made toward improving the health of the organization.

What if you are fortunate enough to be aware you are healthy? Is that enough? Unlikely. Why are you healthy and what will it take to stay that way? Do you exercise only when you are unhealthy or do you exercise to stay healthy? The same is true for a business. A state of enlightenment is only met when an organization knows why it is healthy and takes active steps to maintain its health.

What are the recommended steps to move toward a state of enlightenment? Business leaders have been using several combinations of metrics to determine if the business is healthy. These include the trends for revenue, profit, market share, and market size together with a plethora of traditional business school metrics. This works great to evaluate historical performance, and to the extent inertia exists in business, it will predict future results. In the same way that entropy is forever increasing (Second Law of Thermodynamics), inertia is eroded over time. Therefore, this doesn't create enlightenment. You still need to be lucky to remain healthy. How do we combat this?

Consider metrics such as these to determine how well we are enlightened:

  • What is the value of your innovation portfolio?
  • Is the value trending up or down?
  • What percentage of your innovation investment results in successful products or services?
  • How is your innovation portfolio aligned to your corporate strategy, from both the market and technical perspectives?
  • How trustworthy is the data within my innovation projects?

Here is an even simpler question that the majority of senior business leaders cannot answer within 15 minutes:

  • What is the status of the innovation projects within my organization?
After we decide these questions are important to answer, we can discuss the steps to take that will allow you to begin the journey toward organizational enlightenment.

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