Jack Welch once said:
If the rate of change on the outside exceeds the rate of change on the inside, the end is near.
This raises some important innovation points:
- The rate of change outside is accelerating. There are many, many data points available now making this point. The consequence is that even if our competitive position is solid right now, we still need to pick up the pace of change inside our organisations.
- Technological change means that “outside” is bigger than it used to be. It used to be that we only had to track change in our own industry. But technological change means that the threats are frequently coming from outside our industry now. Toyota doesn’t just have to worry about Ford, VW, and Subaru – now they have to worry about Google, Apple, and Tesla. The same thing is happening everywhere.
- We need to increase our ability to explore. It’s not enough to just be efficient any more. In addition to exploiting existing advantages, we have to explore for new ones. This requires a different skill set, and a different mindset.
- Change fatigue kills the rate of change inside. Lots of people are tired of change – particularly change that they feel is being thrust upon them. We need to find ways to give people enough autonomy that they participate in our new explorations, and help build productive change.
For a variety of reasons, organisations have an increasingly short-term view of the world these days. This is deadly. Innovation is the best way to adapt to change outside. Giving how fast change is accelerating out there, innovating is the only way to make the rate of change inside keep pace.
Instead of constantly responding to external change, innovation is the way that we create the future ourselves.