Tablet computers, etc. This kind of innovation can be called substantive innovation.
Why is it so difficult for enterprises to engage in real innovation? Although the shortage of capital and technology will lead to difficulties in innovation, the real difficulties in enterprise innovation come from deeper reasons. Because the essence of real innovation is change. It breaks or even destroys the existing model, which brings confusion and uncertainty. The enterprise is essentially an organization that pursues efficiency and stability. Therefore, we will instinctively resist or reject these high-risk behaviors that bring chaos and turmoil. In other words, they resist real innovation, but they need such innovation to survive and develop. In a sense, innovation itself is a difficult paradox for enterprises, which is the real reason for the difficulty of innovation.
Specifically, the difficulty of managing this paradox is reflected in the following aspects. First of all, the effective operation of an enterprise needs systematic and perfect management methods and processes, and the bigger the enterprise, the more so. It is these management systems that bring efficiency that affect the emergence of real innovation. Because the normal operation of these management systems needs certainty, clarity and quantification, and innovation in the true sense has the opposite of these characteristics. Therefore, these ideas are easily killed by the normal management process of enterprises in every key link of production, growth, support and promotion. Shell Oil is fully aware of this. In order to avoid the suppression of real innovation by its standardized management system, it set up a department named GameChanger in 1996 to provide financial support for radical ideas. The department controls $40 million to support all high-risk ideas in Shell's development, production, retail and chemical departments.
Secondly, the competitive strength of enterprises comes from core skills and products, and it is these core skills and products that affect the emergence of real innovation. Enterprises strive to build and form their own unique core skills and products, thus forming product differences and thus having a strong competitive advantage. These core skills and products are the main cash cow of an enterprise, so they are closely protected by the existing management team and system. Real innovation often challenges the existing core skills and products, and even requires an enterprise to give up completely, so it will be strongly resisted by managers at all levels, especially when the salary and bonus of managers are linked to the current cash flow. In fact, Microsoft is the first company to develop tablet computers, but this innovation will threaten the interests of its core product, Windows, and was completely banned by the top management, which directly caused Microsoft's passive situation in today's mobile platform era. Similar examples are too numerous to mention.
Third, the maintenance and growth of enterprise performance needs the support of core users, and the needs of core users affect the emergence of real innovation. Generally speaking, 80% of an enterprise's revenue is provided by 20% of its core users. Therefore, meeting the needs of core users is the key to the survival of enterprises, but paying attention to the needs of core users hinders the emergence of real innovation. First of all, core users often pay attention to their current needs, while real innovation often comes from meeting some invisible needs and future needs. In addition, the demand of core users is nothing more than the hope that the existing products are of higher quality and cheaper price, while the real innovation completely rewrites the existing value definition of products. Therefore, meeting the needs of core users can only make an enterprise improve rather than overthrow the existing product framework.
IBM missed the two major markets of personal computers and medium-sized computers because it paid too much attention to the needs of core users.
Fourth, enterprises strive to form a good corporate culture, and it is the so-called good corporate culture that affects the emergence of real innovation. The definition of a good corporate culture is that it can bring stability, cohesion and strong anti-strike ability to an enterprise. Therefore, a good corporate culture essentially emphasizes "invariability", and the so-called "changing with invariability". The real innovation is "change", and it is also a significant or radical "change". Therefore, the corporate culture of most enterprises is actually anti-innovation, and even if the slogan of innovation is shouted all day, this helpless fact cannot be changed. In addition, corporate culture, like a person's personality, is difficult to change once it is formed. If an enterprise does not form an innovative culture at the beginning of its establishment, it will be difficult to establish it effectively the day after tomorrow. Huawei has become the leader of enterprise innovation in China because it strives for innovation at the beginning of its establishment, and innovation and change are the core of its corporate culture.
Therefore, even if an enterprise has sufficient funds, technical reserves and excellent talents, and has the will to innovate, it is difficult to have real innovation. Because innovation is a deep paradox of enterprise management, that is, an enterprise should not only achieve efficiency, but also allow and even create chaos conducive to innovation, maintain profitability and give up today's main cash flow, and strive to meet the needs of core users, but also ignore them strategically and create a stable but adventurous corporate culture. Managing these challenging paradoxes requires an enterprise to have superb management wisdom and strong courage and boldness.
Although real innovation is difficult, it is not impossible. Apple, Amazon, 3M, Procter & Gamble, Google, IBM and other enterprises. Be able to master this profound paradox with ease and create super innovative ability. Of course, these great enterprises also have the same core characteristics, that is, they dare to change, are good at changing, and are diligent in changing. In the final analysis, innovation in the true sense is change, and the reason why it is difficult is to require enterprises that are inherently inflexible and inflexible to constantly change against their nature. If an enterprise dares to be fickle, it will seize the core pulse of innovation. (The author is a lecturer in the Department of Corporate Strategy and Marketing, Cargill Business School, Cambridge University)