Strategic advances are made when organisations become the first to find a profitable way to exploit new opportunities. These opportunities may be created by changes in customer tastes, technology, economics or other external factors, or, more likely, a combination of different factors.
Strategic advances are not made through problem solving. Resolving problems is about dealing with the past, not the future. Problem solving may help you drive performance – or at least return it to previous levels – but it will not dramatically improve your strategic position.
It is innovation that drives profit growth. Successive reports and studies – see here, for example – confirm that companies that lead on metrics such as return on capital and sales growth are those that are best able to drive innovation.
Yet many businesses, and their leaders, remain focused on problem solving ahead of innovation. Of course, you need a mix of both, but the key issue is where your real focus is.
Using the chart, there are four quadrants for you to consider. If you were to divide all your time and focus, what share would you attach to each quadrant?
In my experience, 70% or more of the attention of most chief executives is devoted to problem solving, and up to 50% of it is on ‘fire fighting’, resolving issues as they arise. If you wish to gain a stronger position in your market you must devote a bigger share of your time and effort to systematic innovation efforts; you must become an ‘integrated innovator’.
© Stuart Cross 2010. All rights reserved.