The aversion to change in many situations is often the best strategy. You’ve picked a way of doing something and that’s a smart move; that’s a characteristic of human learning. Something you don’t want to throw away. By Kannan Chandran
But, can you have a healthy respect for being constant and also have your mind open to things that are potentially going to work for you? STORM talks to Dean Alderucci, Adjunct Professor of Strategic Management of The University of Chicago Booth School Of Business.
How do you cope with the uncertainty of innovation?
DEAN ALDERUCCI: It’s about taking on an unknown situation, but taking smaller steps and essentially collecting data and determining the best way to change things. And you make the best guess every step of the way. You don’t try and implement change in a costly way so that there’s a costly failure.
The point is not to reduce uncertainty to 0. The point is to reduce it to an acceptable level.
You can find ways to gently probe in new directions. For instance, if Procter & Gamble wants to introduce a new product, they don’t do a five-year plan. They do a series of escalating tests to collect data — to determine customer preferences that are unknowable since the information doesn’t exist.
They roll out aggressive plans once they’ve collected enough information. They are able to tackle uncertainty in a low-cost way.
Has disruption created more innovative people?
ALDERUCCI: Yes. In the last 20 years, people’s attitudes have changed. Technology allows disruption to occur faster.
Before Facebook there was Myspace and before that Friendster. In a short time there were three iterations of a powerful social tool. That builds expectation that change will occur more frequently.
It also arms people that they can be agents of change, and people become more confident to make change happen.
People are more receptive to innovation in a culture of innovation. The software area will have more innovative people because of the stories of start-ups.
It’s up to the industry to drive change. It’s tough for a few companies in an industry to collectively drive change. They would need a lot of support for innovation in an industry.
How does an organization become innovative?
ALDERUCCI: The CEO can’t just say we are going to favour innovation and leave it at that. That’s just a good first step. He would need to implement a system for innovation to take root and flourish. Bring in a person with a track record of success, set a training programme for the employees.
You can see small results very quickly — in as little as a few months. You can judge by the number of ideas the company generates. And over time, how much revenue new services and products have generated.
As an incentive, it might be good to start a mini company after generating the idea. It takes a lot more work after the idea to turn it into a viable product.
Innovation applies to anything you would do as a human being.