FOR CEOs WHO RECOGNISE THAT INNOVATION
AND STRATEGY ARE KEY TO FUTURE PROFITS

Overcoming Blockages of Creativity and Digital Disruption

Youth, Maturity, and Coming Up With Fresh Ideas

We see a very interesting scenario quite often where companies believe that we need to bring young people into the organisation because young people are going to come up with the fresh ideas and challenge the status quo. And it’s not an appropriate way of measuring; it’s not age that brings skill to the table. You can have very clever young people that can come up with those ideas but you can actually have older, more mature people that come up with those ideas.

So it’s very important to not misunderstand why those ideas are fresh. Often, a young person coming into the organisation is not encumbered with what’s been going on in the organisation. And in that, they’re often challenging and asking reasons why and often seem to be coming up with fresh ideas.

But we actually have a great opportunity sometimes with more mature workers in the organisation because they have a lot of experience. And they actually do ask the question why, but they fear to actually raise it with management. And we need to tap into that because they’d seen what’s going on in the factory line, they know what’s going on with the customers, they’re actually aware of a number of issues that we could actually come up with some great innovation but they’re not communicating it. And a lot of that is because we often create this scenario or culture in the company we regard the older workers may not be the people that contribute to the business.

So it’s very important not to be confused that age will bring creativity, innovation, and new ideas into the business.

A Blockage of Creativity

So the sort of topic that “The CEO Innovation Blueprint,” touches on are issues that might stop creativity in your organisation. You can’t get innovation if you have people not coming up with ideas. So we need to identify what is blocking those issues.

Communication is one of those problems and one of the issues that we find in organisations is the fear of judgment. People won’t raise ideas to the table because they might be judged to be foolish or naïve. So there’s a range of issues that we need to try and deal with or try to challenge it. To site examples that “The CEO Innovation Blueprint” raises is how to change the structure of your business and the culture to overcome those issues.

Very good example is if you have a management meeting, management meetings often dealing with the challenges; why is our revenue not up, why have you got production issues, why do the computer systems fail in the middle of the day and so on. And it’s a very challenging environment. It’s putting that pressure on people; “Why haven’t you performed? Why haven’t you responded? Why haven’t you reacted? Why have we failed here? And why have we failed there?” If you think about it, it’s not really conducive to somebody coming up with new ideas, or fresh ideas, or challenging status quo. Because it’s a very judgmental-type meeting.

So we always recommend is to not have the innovation meeting as part of the normal business meeting so you can create a different culture. So you can create a situation where now you have a different meeting. This meeting is really just about coming up with ideas. It’s not about judging people, it’s not about saying “This is a silly idea.” It’s really about just brainstorming, coming up with fresh ideas, prepared to challenge the status quo without fear of being contradicted or judged for making those environment. And just by having a separate meeting you can increase creativity of your business substantially.

Technology vs Business Model: A Defense Against Digital Disruption

“The CEO Innovation Blueprint” deals with some contentious topics that are important to people right now, and one of those is digital disruption. And many companies are looking at how do we defend our self against the digital disrupter? And it’s very good time to stop and really think about your business.

One of the mistakes that companies make about digital disruption is about the technology. It’s not about the technology. It’s about the business model. And if you’re going to defend your organisation against business with different business model then you need to think about how you change your business model, not follow the digital disrupter’s model.

A good example that we talk about at the moment, of digital disruptions, is about the travel agency. When you used to, 30 years ago order an airline ticket you phone up somebody, the travel agent would actually book the ticket for you and courier a physical ticket. And when you think about what we’ve been doing in the last 20 years in the way that we try to streamline our business, we focus on 80-20 Rule; what is 20 percent of the work that would generate 80 percent of the revenue?

So you can imagine these travel agents who saw this as a great opportunity, develop their business, it’s a low-hanging fruit, it’s a simple process, we book an airline ticket, courier it out, make a cut in the business. And along comes digital disruption of internet airline booking.

So the organisations that get the structure of their business along the 80-20 Rule that actually made them increasingly more exposed to digital disrupter than the general business that hadn’t focused on the 80-20 Rule. Travel agents have been affected by digital disrupters. So how does Flight Center, as a travel agency, doing such tremendous growth at the moment, and this really highlights the issue for any organisation digital disrupters, is Flight Center has moved away from the 80-20 Rule. Flight Center’s focused on the aspects that internet booking systems are very poor at doing.

If you think of a situation, it’s very easy, I’m going to fly from New York to Los Angeles or Sydney to Melbourne go into internet, book one seat, put your credit card tickets, you got your ticket. That’s nice and easy.

Now, I’ve got to travel between countries, I need to make several stops, half-way through the journey we’ve got an appointment with another new customer. We’ve got to adjust the travel journey and I’m sitting there, I’m in a rush, I’m time poor, and I’m trying to deal with an internet booking system that can’t manage it. Along comes Flight Center and says, “We can do that for you.”

So Flight Center’s actually focusing not on the low-hanging fruit but on all the complex stuff and making life simple for the customer. And it’s a very good example of if you’re trying to compete against the digital disrupter, don’t focus on the simple stuff. Really focus on what the digital disrupter isn’t actually good at doing.

If your company’s looking at how to defend yourself against the digital disrupter, don’t do what the digital disrupter does which is focusing on a simple process. Focus on what the digital disrupter is not good at doing and that’s all the complex stuff, the difficult stuff where you can help the customer.

Do Not Mistake Technology for Innovation

When you’re thinking about digital disrupters, it’s very important to re-think what are they doing. And one of the challenges is again, it’s not about the technology.

One of the problems is that we keep making the mistake that technology is innovation. Often, technology is automation. I mean, all a website is doing is that instead of picking up the phone and talking to somebody on the phone who enters the details into a computer system, we get the customer to self-serve and they enter the details for us through a website. But that’s not innovation, that’s automation. Websites have been around for 25-30 years so how’s that innovation?

So digital disrupter with technology is more about methods of automating process rather than coming up with an innovation. Uber is not really innovating. We’re talking about booking a taxi ride which has been around for years. And the website, so if you’re using a web application, some mobile devices to help you to book a cab ride.

It’s an automation process, not an innovation. If you try to compete against the digital disrupter, don’t make the mistake of the technology. Step back, really think about how could I do the business model differently where I can solve the customer’s problem? And after I’ve really thought about that, start looking at how I can use technology to enable that.

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