In the boardroom, innovation has become flavour of the month … again. I’ve seen this happen a number of times in my career as the fads and fashions of focus change in the Harvard Business Review articles, the bookshelves, the seminars and then in the boardroom, in the office, in the factory and on the street. For me this is good on the one hand because that’s what I do. I specialise in innovation. What is innovation? How does it work? Where can it be found? What’s it worth? How can it be improved? etc etc.
On the other hand I get that same frustration because most business-people, when they talk about innovation, talk about new ideas. If you ask them they’ll say, “Well, innovation is all about new ideas”. No. It’s not. In fact, in my experience, idea-generation is a small part of innovation. An important but a minor part.
Mostly, innovation is about decisions. Decisions. Decisions. Decisions.
The question I like to raise with my corporate clients on the subject of innovation is “what should your business do to improve the quality of your daily decision-making?”
I’m still surprised by the ambivalence about it in many of today’s big and small business enterprises.
There isn’t any plan or burning desire to improve decision-making. One gets the impression that it’s a dangerous topic to discuss. It’s another elephant in the boardroom.
I recently asked the top leaders of a very large bank “would you invest 1% of 2014 profits into improving your decision-making across the enterprise for 2015?” They looked at me in genuine horror–it was unthinkable!
This bank has 18,000 knowledge-workers on the payroll and these thinkers represent the banks greatest asset–it’s intellectual capital. When the doors close these assets go home. They return the next day to open the doors and do the bank’s business.
Every day, their most valuable output across the enterprise is decisions. Decisions. Decisions. Decisions. Each one of these decisions has consequences which directly impact on the performance of the company and it’s value to the shareholders. Each decision either costs the bank a dollar or makes the bank a dollar.
So, what is the #1 wisest investment that the bank can make?
The wisest investment that the bank can make is to ensure that all its employees, all the knowledge-workers, are skilled thinkers about better ways to do their job. Better ways to improve the quality of their thousands of daily decisions.
Managers and staff that are not skilled thinkers are just marking time, missing opportunities for growth, and drawing down on the bank’s resources.
Every day each bank employee is paid to respond to specific problems or requests from the bank. Their response can be the unthinking “this is the way we have always done it” or it can be the innovative search for additional solutions, directions, alternatives and consequences to those already under consideration.
Each day the changing business environment offers new opportunities. Bank employess can ignore them with “business as usual” or they can decide to search for deliberate opportunities of a specific nature – new products, new markets, new solutions, new methods, new routes, new attitudes, new concepts, new emphases, new syncopation (timing), new possibilities, new choices, et cetera.
Senior managers make decisions, very often BIG decisions. Traditional right/wrong thinking steers them into making the right decision. All too often the “right” strategy is simply the most recent one. A hundred million dollar decision may be the “best” one simply because a better decision could not be found. The bank may face this dilemma many times in 2015.
Today, tomorrow and every day in 2015 the bank’s 18,000 employees will be making hundreds of thousands of decisions. At the end of every banking day innovation will be not so much about their new ideas but about their much better decisions. The quality of the future of this bank will be a direct result of the quality of these decisions … decisions … decisions.