The worst thing to say to an innovator
Why you need to ignore the competition if you want to innovate
“When America sneezes, the rest of the world catches a cold.” At t he height of t he recent bad debt crisis in the US, regulators in South Africa were concerned that the fallout would affect the local market. Thankfully, we emerged relatively unscathed. Well, most of us, anyway. The homeloan divisions of the local banks at the time might have disagreed. The crisis exposed the poor quality of their loan books, resulting in massive bad debt write-offs – though nothing close to that experienced in the US.
The bank where I used to work was feeling this pain particularly hard. Something had to be done.
It was just the type of challenge my team craved, and we didn’t disappoint. Within a few months, we had come up with a radical idea to address the problem. If it worked, it would simultaneously plug the huge bad debt hole and change the way that homes were f inanced in SA. “Project Mango” as it was called (I still don’t really know why) was not a normal idea. It was edgy, to be sure. It pushed the boundaries. It challenged banking conventions. And I loved it.
The CEO of the bank was not so sure, however. He was chairing the senior executive committee whose approval we needed for further resources to investigate the idea. He pursed his lips tightly together and drummed his fingers on the table. “I don’t know,” he eventually muttered, breaking the stony silence. “I just don’t know. I’m not feeling comfortable.” And then he said the worst six words that you can say to an innovator. Six words that got my blood boiling. He said: “Has it been done anywhere before?”
He didn’t mean to offend. He simply wanted to find out whether or not there was a precedent for this idea elsewhere in the world, and if so, what the market reaction had been. Fair enough, I suppose. But what he actually said – in not so many words – was the following: “I’m not brave enough to blaze my own trail, and I’d rather follow one that someone else has left behind.”
There is no quicker way to kill innovation than requiring new ideas to have been done before by someone else.
SAFETY IN NUMBERS
Large corporates are not geared for risk-taking and uncertainty. They prefer the well-trodden path, the safe option. After all, they’ve got stakeholders and investors to look after and they need to be responsible in how they conduct their business.
The only way to get ahead in such a world is to beat your competitors – to make sure that you offer better products, cheaper prices or better service than the company next door. You’re all competing for the same customers so the talk in the boardroom is all about how to outsmart the competition. When the fund managers do their stock selections, you need to give them a reason to pick you instead of the other companies in your sector.