Four Leadership Actions To Create Stability In 2022 Using Elastic Innovation
Future-seeking leaders are working to create stability in 2022
Future-seeking leaders are working to create stability in 2022. Through the use of elastic innovation, they address challenges and opportunities across multiple time horizons and business areas. They simultaneously manage short-term disruption and make progress on long-term goals and strategies.
Elastic innovation is a mindset that, amidst changing markets, disrupts innovation itself. It entails constantly expanding and contracting market response on a short-term, real-time basis, while remaining focused on managing longer-term innovation pipelines. Innovative businesses are most resilient when their cultures and business models allow them to pivot quickly, navigating market uncertainty and maintaining long-term vision. Leaders in such businesses:
1. Fix “potholes” today while preparing to repave roads tomorrow. One of the most difficult challenges during disruptive periods is addressing immediate, short-term needs at the cost of executing long-term strategies. Yet media are flush with recent stories of companies pivoting operations to retool supply chains, distribution models, customer service protocols and products while maintaining a strategic focus on the years ahead. Disruption often requires a quick shift of effort and investment in areas that were not part of the plan but are necessary and/or profitable in the short-term. Practicing elastic innovation, future-seeking leaders shift effort and investment to “jump” pipeline stages and/or accelerate through the development process to reduce time-to-market. Recent examples: new drugs, vaccines, masks, replacement appliance parts, bicycles and scooters, testing kits, microchips and electronics. Innovation processes themselves flex while maintaining development standards to ensure quality, safety, and product integrity. This approach enables organizations to manage and have impact across multiple time horizons.
2. Ensure having the right people and address long-term talent shortages. Future-seeking leaders understand that the right talent is required for elastic innovation, both to source ideas behind innovation as well as to drive the development of improved products and services. Data suggest the “Great Resignation” crisis will give way to permanent talent shortages in some areas, impacting jobs and skill areas required for elastic innovation. For example: agile engineers, product designers, digital/AI/cloud experts, content specialists and production workers. In this environment, future-seeking leaders take action on talent strategies that involve both offense and defense. They know innovation is about challenging the status quo and requires a diverse and constantly refreshed workforce. With business models increasingly characterized by agile, decentralized structures, organizations need managers who foster elastic innovation, create ecosystems that nurture collaboration, and generate ideas from deep within the organization organically and randomly.
3. Treat risks as opportunities for innovation. Responding to threats in an agile and timely way while continuing to maintain core businesses processes is a form of elastic innovation. Future-seeking leaders acknowledge risk has become a mainstream element of business decisions and will remain so during 2022 and beyond. The frequency and simultaneous occurrence of high-impact risks (e.g., climate, geopolitics, health, financial, supply chain, talent shortages, human capital, cyber, war) likely will continue to increase, necessitating a culture of adaptability to incorporate new information that arrives daily or hourly, and requiring leaders to act decisively when events happen. The role of the Chief Risk Officer and the Chief Innovation Officer increasingly align as they work to create flexibility and address the volatility of risk to address immediate needs and create long-term opportunity without major disruptions to the business. Examples include how to serve customers and protect employees in new ways during illness spikes (e.g., omnichannel retail distribution), extreme weather events (e.g., automated rapid insurance claim management), labor shortages (e.g., agile production models), supply chain disruptions (e.g., onshoring), and cyber-attacks (e.g., User and Entity Behavior Analytics – UEBA).
4. Create a culture of innovation (even for those who are not innovators): The culture required to support elastic innovation goes further than traditional “cultures of innovation,” involving all employees from design and engineering to procurement and legal to production and sales, marketing, and distribution. Such culture amplifies the impact of people and skills. New ideas are cultivated best in an environment where people feel safe to step outside their comfort zone and take risks, where failing is recognized as an integral step of learning, and where broader safety nets exist. Knowing innovation frequently does not come from the top of an organization, future-seeking leaders understand that the incubation of ideas requires a culturally, politically and psychologically “safe” environment for employees, and includes a collaborative and healthy company culture focused on dignity, fairness, inclusion and wellbeing. Leaders support this environment with flexible work and pay, as well as benefit and skill development programs. They use purpose as the leadership glue that drives constancy in company culture while business models and daily operations transform, conveying that innovation is central to driving, sustaining, and protecting company purpose.
Through elastic innovation, future-seeking leaders create impact by seeing the big picture, preparing for and managing scenarios across multiple time horizons, effectively dealing with complexity and ambiguity, and managing paradoxes and trade-offs.