What is the consequence of doing nothing?
Challenging the status quo is one of the hardest part of leading change. In a time when as good as all industries are facing radical changes over the next decade, innovation is necessary for survival. However, all too often, organizations and leaders are stuck in a “wait and see” mode. Rather than taking a leap of faith into the unknown, incumbents all too often find themselves on the steady decline into obsolescence by doing nothing.
The challenge many leaders face is how to prioritize new business opportunities when there are still a number of unknowns in the business case. The result is often a wait and see approach, where initiatives with a predictable solid business case based on linear projections that show a reasonable ROI prevails. Innovation, which is by nature riddled with uncertainty fall victim to the need for more information and analysis, and often ends up as an academic study. Wasting both potential market opportunities as well as internal resources.
When the impact of technology is shaping both customer behavior as well as potential business models, complacency becomes a significant vulnerability and should be considered among top strategic risks for any company out there.
Disruptive innovation gets its potential from incumbent complacency. Where what may be seen as an inferior product is good enough for underserved customers, and slowly improves until it is able to challenge existing paradigms. By the time the actual consequences of disruptive innovation is evident enough to fit the business case template, it may already be too late to act.
The challenge is to recognize the actual risks of doing nothing.
Customer behavior shifts fast, while at the same time, developing solutions that fit customer needs takes time. In order to keep track of customer behavior, companies must recognize changes in customer behavior at a much earlier stage. The winner takes it all dynamics of a digital economy favors fast movers, and the inability to act may result in arriving at the battlefield long after the battle is over.
The characteristics of an exponential world also mean that the stakes are raised. Potential returns are higher for those who succeed, and the potential downsides for those who are left behind are correspondingly devastating. The ability to shift your mindset to actively pursuing opportunities for exponential growth is crucial in order to both recognize which opportunities are worth pursuing as well as when to take a leap of faith. Attempting to do a little bit of everything is equally unwise as doing nothing.
At the end of the day, complacency is challenging to overcome. It is often the by-product of not only past success, but also a steady state of current success. Overcoming this requires leaders to push parts of the organization into the deep end of the pool. In order to succeed it is crucial to have the right people on board that recognize that innovation will be an uphill battle, and is prepared to overcome both trip wires and take some punches along the way.
Both leaders and middle managers should embrace the concept of productive paranoia. Productive paranoia is the ability to be hyper-vigilant about potentially bad events that can hit your company and then turn that fear into preparation and clearheaded action. This does not mean that you should sit around and fear what may happen, it requires you to act on that knowledge.
Investing in innovation may seem expensive as returns are often uncertain from a business case perspective, but the alternative of doing nothing will most likely be even more expensive in the end. In order to overcome organizational complacency and be able to navigate uncertain waters, leaders should replace the fear of the unknown with a profound fear of doing nothing.