Innovation and Strategic Thought

I previously worked for a company whose unofficial strategic vision consisted of the phrase ‘it is what it is’. This mantra was repeated to such an extent that complacency set in and the company nearly failed. Competitive advantages were lost, future product development lagged, and customers began to question what the company focus truly was. Accepting ‘the way it is’ was toxic for this organization and many good people were put out of work as a result. As my former employer discovered, to operate successfully in a highly competitive global market, strategy must be dynamic, flexible, and most importantly born out of creativity from employees who are empowered to think freely and think often.

Since 2008 and the start of this extended economic down turn, it can safely be assumed that managers everywhere have evaluated and then re-evaluated their strategic vision. While many organizations have used this current recession as a means to reduce staff and cut costs while simultaneously trying to enhance execution, it behoves any senior executive to revisits corporate strategy, cultivate innovation and position themselves for the future (McGregor, 2009, p.32). If we are to assume that the rules of business truly have changed, with marketplaces now more dynamic than at any time in history, a stagnant strategic plan is a blue print for bankruptcy. Simply accepting the way things are can no longer sustain a company in an increasingly competitive and turbulent global market (Bonn, 2001, p.63).

The recent past has shown us that companies of any size can be susceptible to a variety of pressures causing their downfall. Whether it is an accumulation of external economic forces or the result of greed and shady accounting practices, it is clear that a successful strategy must “fit the enterprise’s external and internal situation, build sustainable competitive advantage, and improve company performance” (Thompson, Strickland, & Gamble, 2010, p.15). While this may include a planning aspect, to navigate the modern business and market waters, creativity and innovation must prevail. Moreover, if a company is to survive, holding on to existing beliefs and outdated strategic plans can only have a detrimental effect. Considering that the average lifespan of a multi-national corporation is a mere 40 to 50 years (BusinessWeek, 2002), it will take novel and imaginative strategies to buck this trend and survive long term.

The process of strategic thinking is synthetic, divergent, and most importantly creative; these components are needed to formulate strategies addressing competitive advantage and ultimately improve upon its future financial performance (Heracleous, 1998, p.485). Furthermore, innovation needs to be holistic and embraced at all levels of the organization and between all stakeholders. While the idea of deep thought may be considered a time waster by some, and even looked at as counterproductive by our impatient society, it is clearly a necessary step to facilitate innovation, as well as the crafting of a strategy including successfully implementing that strategy. As Bonn (2001, p.65) suggests, “creative thinking is needed to imagine multiple possibilities and to search for alternatives to conventional approaches.” Furthermore, while some brilliant ideas have been formulated while under the gun, more often than not true creative genius comes during periods of down time—time when one can relax, meditate, and dream. Although pressure may often be used as a management technique or a tool to generate strategy, research clearly demonstrates the opposite to be true (Amabile, Hadley, & Kramer, 2002, p.52). Mitzberg (1994, p.108) argues that innovative thinking involves intuition and creativity, which cannot be developed or formulated on any sort of schedule or immaculately conceived; pure innovation in any facet of the company should be allowed to appear at anytime and at any level. A CEO, for example, cannot possibly have the necessary insights to formulate functional-area or operating strategies per se. In these instances narrow and focused knowledge is necessary to formulate initiatives and move the strategic plan forward.

Employees along the organizational hierarchy should be encouraged to think freely about the direction of the company or even their particular division. Instead of asking workers to fill their calendars with what often amounts to uninspiring meetings, time should be set aside to encourage real creative thinking. Strategy sessions should not be confined merely to the realm of management retreats. Instead, empower employees to participate in the process by encouraging innovation and daily down time. I have often found that off site management meetings that are scheduled with the intention to review and generate strategy will typically de-evolve into a formalized planning session void of any creative thought, essentially recycling old and tired ideas. It was Mitzberg (1994, p.109) who stated “real strategic change requires inventing new categories, not rearranging old ones”. This is a paradigm shift for some and it is time that companies start getting creative with how they are going to achieve this.

References:

Amabile, T.M., Hadley, C.N., & Kramer S. (2002) ‘Creativity under the gun’, Harvard Business Review, 80 (8), pp. 52-61.

Bonn, I. (2001) ‘Developing strategic thinking as a core competency’, Management Decision, 39 (1), pp.63-70.

BusinessWeek (2002) The Living Company [online]. Available from: http://www.businessweek.com/chapter/degeus.htm (Accessed: 01 October 2009).

Heracleous, L. (1998) ‘Strategic Thinking or Strategic Planning?’, Long Range Planning, 31 (3), pp. 481-487.

McGregor, J. (2009) ‘There is no more normal’, BusinessWeek, March 23 & 30 (4124), pp. 30-34.

Mintzberg, H. (1994) ‘The Fall and Rise of Strategic Planning’, Harvard Business Review, 72 (1), pp.107-114.

Thompson, A., Strickland, A., & Gamble, J. (2010) Crafting and Executing Strategy. New York: McGraw-Hill Irwin.