Volume 12, Number 9
High Cost of Incremental Innovation
"Dusty" Staub is the founder and CEO of Staub Leadership
He is author of Heart of Leadership and The Seven Acts
of Courage (Executive Excellence, Provo, Utah,
is the price of driving innovation in your organization? The
upfront cost might appear to be only slightly less expensive than
not innovating. Yes, settling instead for incremental change in
processes, ways of working and operational practices can lead to
the urgent need for a work environment and culture that drives
the radically shifting realities of our fast-paced global
marketplace and our demanding customers, incrementalism is often
the path to extinction for a company.
too many years ago there was a company called Hechinger, based in
the Washington, D.C. area. It had grown into a billion-dollar
retailer and was a symbol of success, the dominant player in its
niche in the market. It had expanded beyond its home market along
the Northeast corridor and had reached down into North Carolina.
The company had great core values and a rich 80-year history of
success and profitable growth. The organization was known for its
social conscience and its marketplace performance.
executives also were well informed and diligent. In the process of
scanning their marketplace they identified a strong threat in an
up-and-coming competitor within their industry. The company, Home
Depot, was only a fraction of Hechinger's size, but it had
developed a radically new format, structure and set of processes
that lowered its cost of doing business. This allowed Home Depot
to operate profitably, provide better service and make money at
much lower margins.
executives at Hechinger tried to copy the format with two new
larger stores it opened in North Carolina. Yes, it only
incrementally addressed its own structure, processes and ways of
organization found that it was very painful to address issues in
its cost structure, and that the margins on the new stores were
far less than they could tolerate. Thus, Hechinger backed away for
smaller improvements and changes, leaving the field of innovation
in the hands of Home Depot.
eight years, Home Depot was the dominant player in the industry,
much larger and much more profitable than Hechinger. The old,
venerated company was out of position strategically. In
desperation, with profits plummeting, it jumped on innovative
experiments to try to save the company.
Hechinger has waited too long and was driven out of business in a
few years. Incrementalism
has been the more risky and losing strategy, as it has been for so
many other organizations and management teams.
this reality, why do so many leaders choose tinkering versus
innovating? How do you know if you are falling into this trap?
Here are some warning signs:
Do you see the price of innovating as more painful than saving
Do you convince yourself that you can succeed by making cosmetic
Do you think that everyone else must change but you are exempt?
Do you ignore the human dimension of change, approaching it as if
it were a mechanical process, neglecting to plan for feelings,
thoughts and patterns of interacting with the people involved?
Do you lack the tools, methodology and formats to enable
Do you fail to create a compelling vision and story for innovating
Do you feel, perhaps, too comfortable with the way you currently
are effective ways to initiate and manage innovation. The data
shows that dealing with the growing pains of innovative change is
much preferred to the dying pains of too little, too late.
energy, excitement and commitment that comes out of a company
engaging in an effective effort of this sort is simply incredible.
you willing to pay the price to innovate--or not to innovate? Do
you have the courage to challenge yourself and then others to
change the ways of thinking, interacting and relating to each
other and to your customers?