Turbulence

When (not) to Innovate

innovation | February 2019

Many organizations Peel works with ask us to help them innovate (and disrupt the market while we are at it). In rapidly commodifying industry and service organizations, or in startups facing strong incumbents, this is an appropriate response.

But innovation is also a bit of a hype. In some cases, we see more benefit in focusing on the potential for improvement first and leave the disrupting until later. Sitting across eager innovators, however, I found it difficult to argue – until I came across an interesting interview in the Harvard Business Review with professor Paolo Aversa of the City University of London who concluded that sometimes, less innovation is better.

Specifically, he found that if your organization operates in a turbulent environment, your instinct is to innovate your way out of it, but the chance of failure is high. Instead, it may make more sense to focus on efficiency and execution.

The level of turmoil in your environment is defined by three factors, he says:

  • The magnitude of change. Is the impact of changes in your industry right now higher compared to other times?
  • The frequency of change. Are you always one step behind?
  • And the predictability of change. Is it hard for you to see or influence where your industry is heading?

If your answer to the three questions is affirmative, in all likelihood, you are working in a turbulent environment, and the smart money is on improvement, not innovation, especially if you cannot afford failure right now (but failure is an issue for another blog).

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