It's the ultimate quandary that every forward-thinking company faces at some point--how much do you support exploration into new business territories, and what risk does that innovation have on your main business?
You have your established business, the markets, the operations, and the brand you've created through hard work. But because you're so focused on building out your existing services and products, you don't have time to think about the truly disruptive one. Or, just as likely, when innovation starts taking off within your operations--or runs into temporary setbacks, the establishment will pull back, worried about the risks it will create for your main business.
The quandary affects companies big and small and the solution for all is balance.But balance can be hard to achieve. Here are some ways to approach it:
1. Help the mission-critical and experimental sides of your business understand that they depend on each other
The success of both sides is built on the skills and abilities that set your company apart. Neither side will succeed without the other and without proper balance. Too often though, many companies will focus so much on its established business that they forget to focus on what could be emerging. Then, realizing their mistake, they'll overcorrect by focusing too much on innovation, allowing the other side to suffer.
This is why it's important that operations people and innovators both understand their symbiotic relationship. The core needs to understand from the start that while the innovators may be maverick explorers, their strengths are dependent upon the abilities of the core business. And that they aren't the enemy. Their common goal is to help the company expand and thrive. Meanwhile, the innovators must understand that they can't make it if they explore alone -- they will only be successful if they get support from the core.
2. Put the right skill sets in place
Skills are your ballast. By equipping the core team and innovators with the right skills, you'll ensure both sides can withstand the inevitable storms. As a result, the entire company evolves and becomes stronger.
The key is putting the right people in the right job. For example, you might be tempted to take an excellent operations person and make them an explorer, but it would likely be a mistake. Just because an operations person excels at their job, that doesn't mean they'll be good at innovation. Conversely, don't take innovators and turn them into operators. It's important to understand what everyone's role should be.
Just as important is to find a bridge person. This is often an innovation leader or even the CEO. This person's role is to find the middle ground by understanding and knowing how to communicate with people on both the operations and innovation side. Often they become translators or even mediators. It's very helpful if you choose decision-makers who are able to see the argument that both sides are making and make the right choice for the business.
3. Be patient about investing in exploration
Companies have to accept that investment in innovation will take time to show returns. They also have to be comfortable with mistakes, because those often lead to success in the long run. Invest in your innovators and let the balance of the business operate as usual to pay for it until it makes something profitable. Again, this is where a bridge person can be crucial. They often serve as translator, explaining to the core how the innovations can help them to ensure they set their minds to figuring out how to make money from the new innovation.
An example of this is Eastman Kodak and Fujifilm. Kodak, one of first to build a digital camera, saw its threat to the film market. But unlike Kodak, Fujifilm was more proactive and willing to take risks, developing a three-pronged strategy to protect its existing business while preparing for the switch to digital and investing in new business lines. These included optical films for LCD TVs and even launching a line of skin care products. And unlike Kodak, experts say Fujifilm benefited from more patience from its management and long-term investors.
4. Establish clear rules of the road
It's important to set guardrails for both the operations and innovation side of your business, making it clear how each side should work with the other. Often the instinct of core employees such as legal, legislative, and finance staff, is to advocate for avoiding risk at all costs. At times they will even take on a role that's not theirs, asking questions such as 'Do you think the design works for the product?' or worrying that products are being released before they're 100 percent ready. But creeping across role lines like this can cause big problems. At the same time, innovators need to be reminded that they can't ignore every company policy or legal risk. They have to innovate within certain boundaries that are central to the company's operation.
Balance is critical. It helps both sides understand they're all working to help their company grow and succeed. Putting in place the processes and the mindset to achieve that are what will help both sides focus where they really shine and allow everyone to pull their company forward.