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One of the hardest truths about innovation is that today's solutions can create future problems. That is, no single success promises lasting success.
Whether companies have already achieved breakthrough success or are still looking for initial momentum, they face many of the same obstacles on the way forward. The deeper they remain stuck in today's practices and products, the less likely they are to achieve new success.
As the leader of a company with iconic brands like TiVo, which introduced the DVR, and DTS, which made Jurassic Park's spooky dinosaur sounds a smash hit, I've experienced the excitement of developing breakthroughs in entertainment technology, but also the pressure of leading these companies into the future. Here's what I've learned about navigating obstacles to sustained innovation.
Related: To achieve sustainable success, you need to stop focusing on disruption. Here's why—and what to focus on instead.
Objectivity is a superpower
Focusing on past successes can cause us to cling too tightly to what once worked rather than keeping an eye on the future.
Examples of this abound in business. Kodak, for example, had the means to dominate the digital photography market, but insisted on modeling its digital business on its film business. When digital photography and eventually mobile phones completely disrupted the market, Kodak filed for bankruptcy – a management failure that is now a thing of the past.
To make progress, we must detach ourselves from our achievements and instead strive for objectivity. This means we must constantly focus on the opportunities on the horizon while keeping an eye on emerging threats. One of the most important strengths of a leader? Clear analysis that lets us know when it's time to change course.
But it's not always easy. My company has been at this crossroads many times. For example, we experienced tremendous growth when our revolutionary cinema audio system premiered with Jurassic Park. But that technology was based on film. A few years after the film's release, it became clear that the future was digital. So we sold half the company – the same technology that had made us so famous. It was an emotionally draining decision. But it was also the right one because it allowed us to reposition ourselves for the digital world.
It is important to note, however, that this kind of radical objectivity is only possible in a corporate culture that welcomes constructive criticism and transparency – where leaders, managers and teams challenge each other to overcome prejudices about success.
Value creation should be at the heart of the corporate culture
Another obstacle to innovation? If you fail to get your employees on board.
In a global survey, 75% of respondents said they were given no input in developing a shared vision for their work, and a similar proportion said their work did not give them meaning.
A culture without purpose – the “why” – is a recipe for stagnation. To encourage progress, you need to have a clear expectation from employees that they want to be engaged and continually create value. At the same time, a company needs to motivate its employees to expand their skills and contributions – it needs to encourage outside-the-box thinking, support personal and professional development, and provide opportunities for career advancement.
But employees need more than just a goal; they need to trust that their contributions are valued.
I've found that our team is more inclined to embrace progress when they have some context and influence over how it happens. We start implementing change with a clear plan about the who, what and when, and also think about the impact on everyone involved. Sometimes we start with a pilot or survey to gather key information about the change. This effort prepares the waters by enabling employee feedback and the buy-in needed for larger changes to come.
I experienced this first hand during a major merger in 2020. We developed a clear strategy to combine and then separate the two parts of our company within a set timeframe. We explained it with plenty of context from the beginning, found our change champions, and then spent the next two years executing and adapting to successfully execute on our strategic plan.
Interestingly, a transformative opportunity like a merger also offers powerful opportunities to evolve and renew the company culture. I encourage leaders to integrate as early as possible to not only ensure the success of the transaction, but also to challenge and redefine cultural norms. Strengthening the best cultural aspects of both companies ensures renewal.
Data is important – but it does not have the final say
Data is power. Except when it isn't.
JCPenney made this costly mistake. The company used data suggesting that customers wanted lower prices to justify switching from promotional pricing to permanently low prices. The attempt failed; the company failed to take into account that customers were motivated not only by low prices, but also by the promotions themselves.
I value data a lot. And sometimes it can explain a single problem. But when solving a nuanced problem, interpretation and contextualization are just as important as the numbers themselves.
For us, that means we're constantly balancing new data with longer-term developments in technology, such as the concept that computing power will increase and costs will decrease over time, and we're also taking into account our decades of successes and missteps.
Sometimes that bundle of information leads us to crucial insights. Years ago, when consumers started using headphones, the technology to incorporate high-quality surround sound into them didn't exist. Back then, the data showed that people valued convenience over quality, so the industry made headphones that met that demand.
We interpreted the data differently and assumed that our research combined with these technological developments would eventually enable us to deliver a high-quality headphone experience and that consumers would once again demand quality. And today: our headphones are the preeminent technology for demanding gaming today.
Related: What is sustainable entrepreneurship and why is it important?
Partnerships can unlock untapped potential
Excessive focus on internal innovation can hinder another important path to progress: collaboration.
Most innovations don't come out of nowhere, but by tweaking an existing product to create a surprising new feature. For us, progress often means building partnerships in adjacent industries. The key? Both parties need to benefit from leveraging each other's markets and technologies to deliver something that all their customers love.
These strong relationships have led to numerous innovations. For example, a partnership with BMW has brought our immersive entertainment technology from the living room into vehicles. This collaboration has opened up a new vertical for us while also enabling BMW to meet the needs of drivers who increasingly use their cars as a third space for relaxation.
Sustaining innovation is no small feat. It takes tremendous and continuous effort to turn around a large, established organization with many moving parts. On the other hand, younger companies may lack the capital and mature data needed to change course, or their founders may be too caught up in early visions or successes. Regardless, by being objective, fostering a culture of continuous value creation, and looking for clues in contextualized data and external stakeholders, a company can avoid the one-hit-wonder trap and instead look forward to many more innovations.
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