Very few of us can claim to live a balanced life. In some area or other something is out-of-kilter. It is very challenging to keep a work-life balance – for example focussing on work for the appropriate number of hours per week to allow ourselves time to spend on personal activities, family life, hobbies etc. We can all get the concept of trying to balance our lives between the things that are wanted, needed and absolute necessities for survival.
Extend this thought process to the life of a business. It is almost as tough, and some would say tougher, to get some form of balance in a business. I would suggest that even 10 to 15 years ago this would have been a far simpler task than it is today. That’s not to say that in the “olden days” it was easy to maintain business-balance, otherwise all businesses would have succeeded and none would have failed.
Balance is needed
The need for balance exists in many areas within a business, not least of which is the area of innovation for the sake of long-term existence of a business. Imagine how tough it is for a board of directors or the exco to decide on the allocation of resources to invest in innovation, which can, at the best of times, seem a little intangible and disruptive.
There are many things to consider when a business tries to achieve a balance between the everyday push and pull of its existence. Leadership strives for a win-win combination; keeping customers happy with the current product offering; looking at new offerings to sell to current customers; innovation that will grow both new revenue streams and build a new customer base. All of this is done while the business aims to keep the lights on.
The trap of not knowing
Many businesses fall into the trap of not knowing where to focus their attention. Should it be on current customers and servicing them? Should it be on what is happening across the country on a macro level? Should it be consolidation to protect the current customer base? This is where balance comes in and where trying to keep a balance is now, so to speak, out of whack.
In the past, business was mostly run on a linear basis, that is, things happened in parallel with the economy, customers, competitors and so on. In this linear world, the outcomes were fairly predictable and therefore businesses could use an incremental approach to the world.
In addition, because the world was mostly predictable, a company’s vision and purpose allowed for an incremental move towards its goals.
Today, uncertainty is a part of everyday business. Many of the external factors present are exponential in nature. The disruptions and challenges faced are exponential. Linear or traditional business methodologies no longer apply.
Often when businesses go after the exponential growth areas needed to compete within a world with daily exponential changes, there is disappointment that the initial results are themselves not exponential in nature. Initially the results of innovation drives are not exponential, they chug along merrily. But, assuming all the T’s are crossed and I’s dotted, the growth will be like a hockey stick, sudden and greater than expected.
The time frame for payoff from innovation can be anywhere from weeks to years. The often-used example innovator, Amazon, spent years investing in a variety of businesses and technologies, consistently not being overly concerned with losses from those investments. When the business “suddenly” appeared on everyone’s radar screen as not only an innovator but a global supply chain behemoth, it was evident that the years of investment in innovation had paid off.
Find the balance
Very often innovation is “turned off” too early because it is not showing the desired results. Sometimes the investment is too long and money is wasted. Finding the balance is one of the considerations that keep executives awake at night.
Businesses cannot respond to exponential factors in a linear manner. That’s one of the reasons why we have experienced an explosion of new methodologies that assist businesses in responding outside of the linear and moving into the exponential space. Methodologies like Lean, Agile, Kanban and Scrum are there to take a linear business and help it to think and become exponential in nature.
Yet again, balance is required. Often the innovation aspects of businesses are ring fenced in small teams that respond rapidly and provide early wins while not disrupting the traditional day-to-day business.
Smaller bets, quicker wins
These methods allow businesses to make smaller innovation bets, over short periods of time, with quicker wins and fails, in order to drive the business toward exponential growth opportunities.
There is no fixed proportion that any business should allocate to linear versus exponential. Each enterprise needs to evaluate the many factors at play to find its own unique balance.
I would however caution that businesses that do not currently have initiatives in place to help them grow outside of their traditional linear world, face their own doom, sooner rather than later.
[Photo by Ayesh Rathnayake on Unsplash]