Alexander knew how to innovate.

Alexander the Great was known as a great innovator in matters of war and competition. Napoleon was using Alexander’s techniques a thousand years later and they still worked (well, except that last time…).

Alexander looked for different ways to do things. For example, Alexander was the first to use the ‘strike at the weak spot’ strategy. It seems simple and obvious now but starting in 334 B.C. it had never been formalized and he used it to shatter more powerful, better equipped armies. Never satisfied, he then refined it by cleverly creating a weak spot in the enemy line, then attacking there.

How? Simple if you look beyond the obvious. Alexander knew the enemy (his competition) was always watching him. He realized he could cause the enemy to physically move around by moving his own men. Using this, Alexander would, by moving his own men, carefully have the enemy arrange itself in a manner that would ensure its own defeat. This led to less costly victories for Alexander and in war cheaper is always better. This is why smart Generals/CEOs/managers are always asking themselves, “How can I control my competition?” This makes competition cheaper and thus better for our shareholders. It’s fun too.

However, in the example, you need to look carefully at what Alexander did. It has two parts. One was the pure innovation (strike at the weak spot), the second was a refinement (create the weak spot in the first place)—the second was a sustaining move on the previous innovation. Don’t confuse them.

One of the definitions of a well managed company is one that carefully listens to its customers and provides what they want. Super performing companies do this better than their competition via a sort of hyper-alignment with their clients.

But this extreme client centricity relative to innovation does carry a risk. You are thinking inside the box (e.g. the client’s). And if you are doing a good job you are probably receiving rewards and that feels good in all sorts of ways. But you probably aren’t truly innovating. You must objectively examine your actions and see if you are really just sustaining, in some fashion, an existing product or service (even if it’s “new”). There’s a difference and the difference can doom even a great company.

How? Even if you are performing greatly you have to ask yourself what will you do if somebody comes along with a client usable solution that is so different that you never even thought of it? Your client never thought of it either. In fact, maybe nobody but the goofy guy in the fabled garage, or some small market “skunk works”*, ever thought of it. But it works better than your solution. And your clients gravitate to that new solution because that’s what their shareholders expect them to do—wouldn’t you? (*Have you ever noticed how small cap skunk works often smell like money?)

What makes this especially grim is, on the surface, you’re being penalized for being a “good” company. A well managed company. You listened and were guided by your clients. Maybe you even took a bit of a chance and got out in front of them—helped them see a marginally better way. Even improved them. Companies win awards for doing that.

However, in many cases what we’re doing with the innovation, without knowing it, is simply treading water. Looking at the knot the same old way. In fact some of your well intentioned, engineering driven, innovation may simply be “over-satisfying” the client’s need and that’s not helpful to your shareholders. In fact it can be damaging because you are diverging from what your client actually needs and wants to pay for. Less can be more. Eventually customers learn this.

The point is although you are admirably aligned with your clients you are still at risk because your client will switch away from you if a better way comes along (they have to).
 

Find your industry’s Gordian Knot. Then untie it.

The challenge is to also venture outside the often small and constricting, client-driven, innovation box. Really do it. A lot of us think we do it, but we don’t. Not really. Why? Frankly, it’s a strange place for a traditionally well run company. Too many unknowns. Somebody will ask you, “But what’s the ROI going to be?” Huh? You can’t analyze what doesn’t exist. True innovation, the real fresh stuff that flips your industry on its ear, is a financial analysis black hole. I know many CFOs and they have it tough enough already.

But you have to do it. Some call it “disruptive technology.” That’s a bit pop for my tastes but the idea is there. And I agree with it. It is, after all, the polar of merely sustaining and that’s risky. It speaks to the notion that you can’t get stuck—sometimes you have to just throw away what you call normal.

Whatever you label it figure out how you are going to pay for it and who is going to do it. Then give them some space and stand back. If it were me I’d tell them, to come up with the industry’s Gordian Knot and when they came up with it I’d tell them “Great, now go figure out how to untie it. Or find the guy or gal in the garage—they may already know. Take a checkbook.”

Is the approach too weird? Too expensive? Then create an internal mechanism (preferably an accountable person or small group—and yes, it would be a peculiar job description) whose job it is to know about anything (ANYTHING!) that can cause your customers to do things differently. Why? Because if they start doings things differently they may not do them with you. And this has killed off many a “great” company.

I once had a plaque made for my office wall. It said: “A company exists to create customers.” As I’m older now I think I should add: “for a long, long time.” Focusing a little less on what we can actually see and measure is a good way to ensure the new addition.

Think about it…