The Secret To Success
What makes an organisation successful? Able to grow and prosper through changes over a number of years? And what of those organisations that fail? To be successful organisations need to do two things well: optimise their present operations and develop innovative ideas which lead to new products, services and markets. If we define innovation as change leading to positive outcomes- be it in the form of a product, process, or system- it becomes apparent why those organisations that master innovation are those that achieve lasting commercial success. Organisations operate in an environment that is constantly changing.
The Innovation Dynamics framework was developed through extensive research by Adair. This framework reveals four competencies essential for an organisation to be successful in the long term: building entrepreneurial direction, generating innovation capacity and competencies, managing and being adapt to environmental change and continuing to focus on sustainable outcomes.
Entrepreneurial direction is best demonstrated through leadership within the organisation. What is the vision of the organisation, the culture, and the governance structure? What timeframe is the organisation focused on; current operations, the near future or longer term?
Innovative organisations have a clear vision, share a common belief system, and organise their internal process and resources according to this vision. The most innovative organisations focus not only on the present but also the long term future, with a clear vision of what is possible in the future and what their role in it will be. Their actions today are what create and drive tomorrow’s innovations.
CSL is an excellent example of this entrepreneurial spirit. Having started in 1916 as the Commonwealth Serum Laboratory, a government organisation delivering vaccines, CSL has gone on to become one the world’s largest plasma and blood products company, diversifying from their origins as a serum laboratory.
Another prominent example is Richard Branson’s Virgin Group. In Australia we have Virgin Blue, V Australia, Virgin Mobile and Virgin Money, all entrants into well established markets but using their brand and innovative product offerings to service an unserved or underserved area of the market.
These companies have been able to achieve sustainable growth by focusing on the customer’s needs and achieving a return on investment (ROI) that ensures corporate viability. Corporate viability has been the focus of many organisations for the last 2 years due to the Global Financial Crisis (GFC). The average age of a company is somewhere between 12.5 and 40 years, but there are organisations that are much older than this. In fact the business widely recognised as the world’s oldest is Hōshi Ryokan a hotel and spa in Komatsu, Japan. For close to 1300 years the same family has continuously run a hotel on the site of these famous hot springs. The world would have been very different in 718 when this hotel first opened its doors. Through 46 generations the Hoshi family has operated this business, changing with the times to meet the needs of its customers. In 2010, the hotel even has a website. Hoshi Ryokan earned the title of the world’s oldest business in 2007 when Kongo Gumi, a Japanese temple builder,
operating as a family business since 578, closed its doors. Businessweek attributes this closure to excessive debt and the unfavourable business climate in 2006. So after over 1500 years of operation, success is not assured.