What Retards Innovation

Innovation is a hot subject, and for good reason. If a company is unable to innovate in a changing environment, it may as well start writing its own obituary. What does it take to be an innovative company? Take the Japanese company. Sony was once a leader of the Japanese economy and a technological innovator, but it appears this is not true any longer. Sony has failed to innovate I have misplaced the reference, but a business professor said in a WSJ article that the problem with Sony is that they don’t have a strategy. They need a strategy: should they join the internet? Should they join the games business? What should Sony be all about? As I read the article, I realized that Sony’s main problem is not a strategy on what to innovate. Lack of coherent strategy is the manifestation of the problem. The cause was somewhere else, and the article did describe it. The article described a situation where the heads of departments in Sony were fighting with each other and not supporting each other. There was a lot of disintegration. To me, that sounded like the root of the problem. When there is internal fighting and a lack of cooperation, what happens? There is wasted energy within the company and, as we know from physics, energy is fixed. There will be less energy left to innovate, and innovation requires large amounts of energy. Look at innovators or any seriously creative person. They are often considered prima donnas. They want everything around them to be under control so that none of their energy is wasted; they want all of their mental energy to be available for engaging in their creation. In countries where there is corruption, bureaucracy, and intense government regulation, it is very difficult to innovate. Large amounts of energy are wasted. Entrepreneurs and their money run away from a country where there is no law and order to countries that do not waste their energies. In PAEI language, a threshold level of (A) and (I) is necessary for (E) to happen. So, what should be done at Sony? I would put strategy on the back burner for now—it is too early to deal with that. I would start first by breaking down the organizational silos. I would make the top executives aware of their interdependency (i.e., deliver a Syndag, phase I of the Adizes Program for organizational transformation). Next, I would identify the mission for which interdependency and mutual support are necessary. Only once I was able to change Sony’s culture and break down silos and mutual warfare, would I proceed to design a strategy for innovation, and then design the organizational structure to innovate successfully. The typical prescription consultants give is to design strategy and expect innovation to happen following the strategy. I wish it were that simple. If you develop a strategy and submit it to a company where people are fighting for power or hold over their positions, if the new strategy requires changes in their power or responsibility, the corporate leaders will resent the new strategy and innovation will suffer. As Peter Drucker noted, “Culture eats strategy for breakfast.” Yes, indeed. Just thinking, Ichak Kalderon Adizes