Shipulski On Design

Innovation is difficult because it requires novelty. And novelty is difficult because it’s different than last time. And different than last time is difficult because you’ve got to put yourself out there.  And putting yourself out there is difficult because no one wants to be judged negatively.

Success, no matter how small, reinforces what was done last time. There’s safety in doing it again. The return may be small, but the wheels won’t fall off.  You may run yourself into the ground over time, but you won’t fail catastrophically. You may not reach your growth targets, but you won’t get fired for slowly destroying the brand. In short, you won’t fail this year, but you will create the causes and conditions for a race to the bottom.

Diminishing returns are real. As a system improves it becomes more difficult to improve.  A ten percent improvement is more difficult every year and at some point, improvement becomes impossible.  In that way, success doesn’t breed success, it breeds more effort for less return. And as that improvement per unit effort decreases, it becomes ever more important (and ever more difficult) to do something different (to innovate).

Paradoxically, success makes it more difficult to innovate.

Success brings profits that could fund innovation. But, instead, success brings the expectation of predictable growth.  Last year we were successful and grew 10%. We know the recipe, so this year let’s grow 12%. We can do what we did last year, but do it more efficiently.  A sound bit of logic, except it assumes the rules haven’t changed and that competitors haven’t improved. But rules and competitors always change, and, at some point the the same old recipe for success runs out of gas.

It’s time to do something new (to innovate) when the same old effort brings reduced results. That change in output per unit effort means the recipe is tiring and it’s time for a new one. But with a new approach comes unpredictability, and for those who demand predictability, a new approach is scary. Sure, the yearly trend of reduced return on investment should scare them more, but it doesn’t.  The devil you know is less scary than the one you don’t.  But, it shouldn’t be.

Calculate your revenue dollars per sales associate and plot it over time.  If the metric is flat over the last three years, it was time to innovate three years ago.  If it’s decreasing over the last three years, it was time to innovate six years ago.

If you wait to innovate until revenue per sales person is flat, you waited too long.

No one likes to be judged negatively, more than that, no one likes their company to collapse and lose their job. So, choose to do something new (to innovate) and choose the possibility of being judged. That’s much better than choosing to go out of business.

Image credit – Michel Rathwell

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