What type of environment generates innovation?
Answer: An environment that celebrates and rewards failures.
In the business world, it is all about success. However, if we want innovation we need to experiment. This is trial and error. Therefore we should not punish failure; we need to reward failure. The military is a good example. If you lose two legs, you receive a medal and you are celebrated.
In Silicon Valley where people openly talk about failure. The mantra is: I try things, I experiment, I am proud of my failures. The US has created a place
where you are free to know, free to go, free to do and free to be. Ultimately free to fail and free to succeed and each breeds the other. Organisations should not hide failure.
Where does success (money) come from?
Money boils down to ideas; some good and some bad. The idea has to stand a test.The test is: can the idea provide me with a temporary monopoly? Examples include the iPad, iPhone and Lady Gaga.
You have it, but it’s temporary. Most companies are one hit wonders. The monopoly (albeit temporary) is innovative – this all equals money.
The system is cyclical; you get an idea, you innovate it, create a temporary monopoly then reap the reward (money), then start all over again.
It is difficult to have a temporary monopoly in technology due to the distribution of information. Some innovations are necessary but this is not sufficient for success. There are possible directions for organisational success:
1. Survival of the fittest (not the strongest or the fastest) – this is the ability to change and adapt to your environment and situations.
2. Sexual selection – “peacock theory”, chosen for beauty and attraction (the peacock cannot fly, run, or hide therefore it should not exist – it is “anti‐fit”)
The above two principles are “fit” and “sexy”. Fit = responds to signals; can change; is adaptable. The system is around the principles of being a fit business. Sexy = stands out; looks good; is a piece of art and people are willing to pay – everything is designed from the sound and smell to aesthetics. Apple never professes that its hardware is better than the competition, but it creates a “lickable” technology culture where IT does not even come into the equation.
3. The final possibility is the creator (Mozart) – breaks new ground and creates again and again.This is a company free from silos and barriers. The organisation looks laterally.