Frank Underwood is perhaps the last person I would turn to for sound, ethical advice. However, in my recent binge watching of the highly addictive House of Cards series, he made a snarky remark to (tv) President Walker that caught my attention…
“To improve is to change. To perfect is to change often.”
While his reference was directed at manipulating policy strategy, I believe the essence of this statement has tentacles that extend far beyond the realm of politics.
Having been around the block as both an executive leader and innovative change agent, I have all too often seen the struggle of corporate leaders of Fortune 500 companies caught in a balancing act trying to combine the desire to improve with the willingness to change. As organizations grow, so do the stakes that are at risk. This undoubtedly places many leaders between a rock and a hard place as they strive to avoid becoming the afterthought of a company that ‘once was’.
Being able to balance organizational improvement with a culture willing to change is what, in my view, will separate the winners from the losers in the game of timeless, sustainable innovation. And needless to say, with change, oftentimes comes failure (which opens up a topic for later discussion).
Let me first clarify that in my reference to innovative change within this context, I am not referring to the pivots often made by the young, nimble startups; but rather change that is required of large, growth and mature stage corporations.
So how do big corporations improve through change…and hence innovate?
While there are many possible ways to achieve innovative change for big corporations, in my experience, there are three critical foundational components to success…(that, if ignored, will amplify the odds of organizational doom and gloom.)
- Organizations need to identify a protected, internal champion supported by a small, dedicated nimble entrepreneurial team that are tightly aligned to their internal strategic imperatives.
- Leaders need to provide a safe-haven environment that separates accountability from core business goals with modified success metrics.
- Leaders need to support any ongoing innovative efforts by walking the talk and living the values from top-down to achieve universal cultural buy-in.
To highlight an example in action (and we all like real life examples as samples of proof), Google X (and formerly google labs) is a micro-entity purposely created to be the internal change agent initiative for Google operated within and alongside a colossal giant of an organization. Larry Page recognized the need to create an internal ‘hack team’ that can rapidly explore and prototype new models of innovation that supports its core business and vision without distracting other ongoing efforts. He established a separate micro-entity, Google X, that is measured on goals drastically different from its core business. In support of his change agent creation, we often hear Larry Page passionately speak in support of its crazy moonshot idea lab that has universally infected the culture throughout the organization and beyond. As such, we now see similar internal pop up innovation labs being created by the likes of Samsung and Ford, among a few others.
But as Frank Underwood duly noted, it’s not enough to simply change once. We must also seek to perfect through continuous change. Which leads me to the next question…
How do big corporations perfect themselves through continuous change?
While achieving a single change may get you one step ahead, it does little to guarantee long-term differentiation and success. This is what separates the great from the good, and this is where most companies fail to succeed. Over time, we all know that people, ideas, needs, problems, and everything else changes. That is one thing we are 100% certain of. So it is only obvious that organizations too need to continuously adapt through change by keeping up with the evolving markets.
This is often tough to do from the ivory tower when those at the top are constantly surrounded by yes-men, i.e. an executive management team who has little to gain by altering the status quo; and, unfortunately, much to gain from maintaining things as usual. This conflict and facade must be pro-actively recognized and managed if one wants to create greatness for many generations ahead.
In the journey to perfection, it requires organizations to self-reflect by taking a close look in the mirror and evaluate on occasion what is working and not working as the company, market, and user needs evolve. I can honestly say, this is tough for many leaders to follow because it often requires one to abandon profitable pieces of the business that may be on the way up, but have short-lived opportunities due to the shifting demands of the market. The industry often refers to this process as re-invention, but I like to refer to this as the Madonna Curve.
What is the Madonna Curve and how does it apply to perfecting innovative change?
The Madonna Curve illustrates the ability for an organization or an individual to recognize when and how to re-invent themselves when they are at peak performance…not on the slippery downslope. This requires one to essentially disrupt themselves before someone else does it to them. The best example of this, of course, is Madonna (the legendary and timeless singer) who time and again, re-invented herself at the point of peak performance through continuous change; thus preventing any fire-drill situations requiring her to shift or alter her identity once its too late. Quite simply, she maintained a perfected brand by continuously adapting with the changing times to stay relevant based on the shifting consumer tastes of her core market.
Similarly, in the corporate world, while Apple is the most obvious example to illustrate this in action with there pro-active cannibalization of the iPod replaced with the iPhone, I will attempt to offer another example to avoid the usual clichés we typically hear of.
Lets take the story of Netflix since I opened up with a reference to its original series program, House of Cards. I recently had the honor of sharing a keynote stage alongside Marc Randolph (co-founder of Netflix) where I was able to learn some of the inside back story story behind the innovation underpinnings of Netflix. While there are many controversies surrounding the strategy by which Netflix has introduced its innovations and business offerings, at the core is a an organization that recognizes when it is time to adapt,disrupt and re-invent itself while at its peak of profitability. Originally developed as DVD mail-order subscription program, the leaders of Netflix envisioned future scenarios early on in its business knowing that the markets would soon shift from mail order delivery to online distribution and eventually to streaming services. By keeping close tabs on the market and user trends, it eventually recognized the market for streaming services was growing at an exponential pace. Although its DVD mail order and distribution service was still on the up and up, the leaders of the organization recognized the pending risk of being irrelevant if it did not aggressively shift its strategy towards the rapidly growing demand for streaming media offerings. In an attempt to stay relevant, innovative, and competitive, they made the difficult decision to once again, disrupt its core business and change its business model to achieve perfection.
So, in conclusion, if big corporations want to improve and perfect themselves, they must (1) incorporate an internal model that fosters positive change through innovation using the 3 foundational points mentioned above, and (2) continuously re-invent themselves through self-reflection by recognizing where they are on the Madonna Curve and creating a culture willing to question its core strategies.
Frank Underwood may be a political ass, but his words will forever remind me of the ongoing innovative challenges big corporations face when looking to innovate in a world undergoing massive transformation.
And, yes, this applies very much to healthcare as well!.. so reach out and lets discuss how we can transform your organization to innovative perfection.
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