A Company’s Innovation Quotient (IQ)
A company’s innovation quotient (IQ) is the ability to implement a positive change in all the facets from the operations to the product itself. A high IQ business is usually able to come up with an astounding product or service. It is because of an in-built innovation culture that encourages employees to generate, pursue, and experiment with new ideas. It not only gives a company the first movers advantage or creates value for the customers, but also yields towering results for the company itself.
The Importance of Innovation
Corporate giants like Tesla, Apple, Google, and Amazon are successful due to the high level of innovation. It is because change is central to everything these companies do and not just limited to just a department or team under Chief Innovation Officer. These companies structure themselves to facilitate innovation by applying a distinct employee policy, recruiting the young management team, embracing new software programs, or adjourning old unproductive practices.
A company is destined to deteriorate if it never changes the way it is being run. Innovation requires constant changes to the methodology of production, marketing, or the product itself. Such a company is plodding down on a route towards irrelevance. The irrelevance path begins with stagnation in the company’s growth, causing it to fall by the wayside. The company then becomes a case study on the importance of keeping up with evolving market dynamics.
Whether a company is old or young, it should monitor its innovation quotient (IQ). It is because constant and systematic self-evaluation is a prerequisite to adopting change. A business with a low level of positive change does not utilize its people, policy, products, and processes optimally. And, the potential revenue or profit it could have earned would be compromised
Growth vs. Irrelevance
One cannot use standard business metrics, including market share or profitability, to understand the direction where a company is headed. These metrics are not an accurate gauge for success in the long term. They may give misleading results. Companies often face the classic innovator’s dilemma. They, on the one hand, have a sound market position and financial capability to innovate and create value. On the other hand, they are mesmerized by the current high revenue level, making them rigid towards ongoing product/service and strategy.
A company that is run through a trailblazer mindset will find success. It can yield record returns as pioneers. Innovation is a continuous cycle that companies must adopt. There is no single business model that will guarantee lifetime triumph. Market positions are temporary and companies like Nokia, Blackberry, and Kodak, who thought otherwise, enjoyed success for some time before things started moving south. Such companies were the talk of the town previously but are irrelevant today.
Some companies are unaware of the right way to invest in innovation. Even though it is core to their success, they often outsource it to consultants or come up with an innovation center. Companies get into the illusion of being innovative through these popular techniques. They might look pleasing to the eye but are worthless and just a waste of time and resources.
The best way to determine whether a company is on the path of growth or irrelevance is to examine whether it has an environment that supports innovation. Change is inevitable if a business builds an environment conducive to innovation. If the management and the employees are empowered to innovate, the company is headed north, towards growth. Many successful companies lay down protocols of reporting a potent idea to the upper management. This encourages employees to discuss different types of change that could be implemented.
Research suggests that the company’s leadership should believe that innovation is critical to its success. It will make them come up with a process for testing, developing, and advancing new ideas. Such a company would include innovation in the job description of all the employees. It may also give monetary or non-monetary incentives if someone comes up with a meaningful contribution. The leadership should believe in providing value to the customers and consider failure as a step towards a worthwhile change.
Discouraged Energy vs. Unfocused Energy
The primary problem with many businesses right now is that they change way too slowly. Others are reluctant to change at all. A company’s leadership is not able to lead dynamic change due to either discouraged energy, or unfocused energy. The discouraged energy or burnout results in overtime when an individual has had several unsuccessful attempts at transition. Such leaders have a high level of absenteeism. They complete the assigned tasks late and often come late to the office.
When a leader is scattered between multiple new ventures at the same time, he suffers from unfocused energy. This leads to an unclear prioritization or time frame for the completion of these initiatives. Such leaders often conduct meetings that do not have a clear plan. The confusion shifts to the employees as to which projects should be given priority over the others.
Unfocused and discouraged energies are not eternal. Business leaders realize that they have the power and ability to fight them out. A leader with discouraged energy can go on a long vacation to follow the natural cycles of work and rest. On the other hand, the frantic leader can prioritize his work and stay focused. Lastly, bosses having a combination of both the problems can take some time off work and read a bit on how to manage a business.
Innovate, Innovate and Innovate
To conclude, the mantra of every modern-day company should be to innovate, innovate, and innovate. Oak Business Consultant is specialized in providing consultation on these matters. We help businesses to build a robust financial model and business plan along with Pitch Deck. Visit our website to consult with us for free.