The key to long-term success in today’s new world of work is innovation — it’s not an option, it’s a must, says business strategist Lital Marom. The challenge for leaders will be learning how to best balance investment in innovation alongside uncertainty and risk.
In a recent article with Forbes, Lital shared some of her best practices to help organizations jumpstart their innovation engine with little investment and minimal risk.
Manage the “Exploit” and “Explore” Portfolios
The pandemic, Lital writes, showed that in order for businesses to thrive they must manage the present while simultaneously investing in the future. This two-pronged approach requires two different strategic ways of thinking:
- Focus on managing and improving existing business models. This “exploit” portfolio, Lital writes, “limits uncertainty by using known business models to serve known customers.” The strategy with this is to cut costs while improving performance and efficiency.
- Test and evaluate new value propositions and business models. This is the “explore” portfolio, which focuses on discovering new ways of serving your market, i.e. future growth. “The key drivers here are flexibility, agility, adaptability, and speed,” Lital writes.
Build a Culture of Experimentation in Your Business
Before leaders can begin building their “explore” portfolio though, they must foster a culture of experimentation. The biggest obstacle to innovation isn’t technology, it’s a company’s culture.
Ask yourself, Lital writes, “Are you willing to discover that you could be wrong? How much autonomy are you ready to give to those who work for you?” If leaders aren’t willing to empower their employees to prove them wrong and contribute to the future of the business, you will never fully reap the benefits of experimentation.
Experimentation puts the power into the hands of all employees — not just those in research and development. It creates an atmosphere where every employee can bring forward ideas and test them. While most of these experiments are likely to fail, it’s actually less risky to run more small and inexpensive experiments than invest in one project. “A low success rate on a larger number of experiments translates into gains that diminish the costs of the failures,” Lital writes.
Failure provides greater insight into your market which reduces uncertainty. Gradually through experimentation over time, you will learn more about your customers and can increase your spending towards their needs based on the knowledge you gain from failing.
Why Your Company Needs a Chief Entrepreneur
Traditional CEOs, Lital writes, tend to focus on the “exploit” portfolio, as defined above. This is why it’s important to appoint someone else to manage the future of the business, or the “explore” portfolio. Lital suggests creating the role of a Chief Entrepreneur (CE) whose goal is to foster a culture of intrapreneurship that will lead to growth and transformation.
The CE works in partnership with the CEO to execute that two-pronged strategy, Lital says, and ensure each prong is given the attention needed to flourish. The forward-thinking of the CE will help foster that culture of experimentation where failure is seen as an opportunity for learning and growth. This is the key to transformative innovation.
“Organizations that improve their established business model (exploitation) while at the same time investing in the future of their business (exploration) will be the ones that will thrive,” Lital writes.
Lital shares more of her breakthrough innovation framework in her new keynote, “Future of Work: New World, New Rules”. To survive today’s high-velocity era of constant disruptive change, leaders need to re-imagine how their organizations operate in order to scale faster, increase profit, and maintain their competitive edge in this new world of work.
Interested in learning more about Lital and what she can bring to your next event as a keynote speaker? Email us at [email protected].