For Institute members and other financial advisor readers who have not attended a global, cross-industry innovation conference, this article will give you an overview and insights from this year’s Front End of Innovation Conference(FEI) in Boston last week.
Although there were more than 550 innovation practitioners (corporate innovation leaders, innovation consultants, innovation labs, academics, accelerators, startup companies) from 323 organizations at FEI, financial services unfortunately was not highly represented. The conference was built with speaker/practitioners sharing best practices, case studies and exploration along six key tracks of innovation: rapid product development; leadership, culture and teams; customer-centered innovation; open innovation and new partnering models; business model innovation; and strategy and management.
A key theme resonating throughout the conference was the need for today’s management and business owners to acknowledge that they are operating in a business and cultural environment of accelerating change. No one does a better job of explaining the speed of change today and what’s needed than Singularity University and Trend Hunter. Here are some comments from Kian Gohar, Singularity's executive director of innovation:
Exponential technologies have been a very consistent trend historically and they have applied to every major industry that we have looked at. Also, it’s very deceptive. In linear versus exponential growth, when you are walking exponentially, it starts with the one step to two steps to four steps to eight steps, it seems really slow, you don’t see the growth, but when you get to 256 then 624 etc., etc., that’s when it gets really powerful. So some of the technologies that have come out in last few years you may think that they may not be relevant to what you are doing, but they are moving very quickly and will affect things in ways you cannot see yet. And they are very disruptive as well. 40% of the companies in the S&P 500 in next 10 years will probably no longer exist. Kodak is a great example that - back in 1996 they had 140,000 employees and $28billion and they had invented the digital camera, which they shelved. You fast forward to 2012, they went bankrupt. Next year a small company with 8 employees created a new photo app called Instagram, a new digital product that replaced Kodak. We like to call that the new Kodak moment.
Jeremy Gutsche, CEO of Trend Hunter and author of Better and Faster: The Proven Path to Unstoppable Ideas, provides his views here:
Mathematically, the average duration of a company on the Fortune 500 list in the 1950s was 75 years and now it's 15 years. A recent McKinsey study stated that 40 percent of the current list will not be around in a decade. The reason why is that companies are not structured to adapt. We are structured to find a value proposition and put in rules, policies, procedures to brand, structure and optimize that value prop. And in the 1950s that was great, that was fine. But now it’s changed. You are now required to shrink the innovation cycle, to accelerate it… to go from a linear way of thinking where we are great at predicting next year and instead get into a more accelerated mode of understanding of how chaos and new ideas work and how that accelerated pace is something that you can get control of.
In an environment of accelerating change, many speakers urged management and business owners to look at innovation not as a side experiment or one-off tactic, but as a core component of strategy itself. Explaining how that idea can be taken to its fullest development was Vijay Govindarajan, author of The Three Box Solution Strategy for Leading and Executing Innovation:
Strategy is not about the past or present but about leadership in the future. Because an organization is a leader today, you cannot assume you will be a leader tomorrow. And earning that leadership is what strategy is all about. One thing we know is that all industries will change in the future. Therefore if you want to be a leader in the future you have to adapt to change. Another word to adapting to change is innovation. Therefore I say strategy IS innovation. If you are not doing innovation in your company, you are not doing strategy, you are doing something else.
Many speakers spoke about the need for understanding why companies have such difficulty addressing today’s challenges. Only in understanding these challenges will we know how to engineer ways to address the specific obstacles that prevent us from moving faster and being more innovative. Jeremy Gutsche, CEO of Trend Hunter and author of Better and Faster: The Proven Path to Unstoppable Ideas, commented:
After thousands of years of evolution, we became farmers, simplest metaphor we like to use. Once you find ways of doing things, how to execute an idea, how to rollout a product, we are pre-wired to repeat and optimize whatever was last year’s harvest. The three traps of the farmer are once we become successful as brands, as people, as team leaders, we become complacent, we lose the hunger that we had. Next we become repetitive, we continue the process that got us to where we were last. And finally we become very protective, especially of our egos. So let me give you a different way of doing business to get to the hunter instincts. Fight complacency with instability - always be testing, learning. Instead of repetition feed your curiosity, look at other industries, trend spot, find ways to collect interesting ideas. And be willing to destroy - destroy egos, old ways of doing things.