Simple, bold solutions trump complex, incremental initiatives nine times out of ten. So why do we often pursue the latter when it is harder work and lower reward?
I have been thinking about this issue since a client of mine told me the following story. Prior to commencing his business career, Rick was a mining engineer in South America, looking for gold. The best place to find gold is in rivers, but getting it out of the water can be very difficult. Various mining companies had therefore invented their own complex machinery that sifted the base materials of the river from the water in the hope of finding gold. The machines and the processes they used were slow and costly.
Rick’s team decided to try a different approach. Using explosives they blew up the course of the river, causing it to divert down a different path, and rejoin the original course further down the stream. This allowed them to walk down the river and pick up the gold quickly and easily.
The big difference between the simple, bold solution of Rick’s team and the complex, incremental initiatives of the other mining companies is the willingness to accept some uncomfortable consequences. Diverting the river created environmental, engineering and (probably) political consequences that Rick and his colleagues felt were worth the pain.
The other mining companies literally went with the flow. They accepted the current environment and saw their objective as getting gold out of the water, not how to get it off the river bed in the simplest, quickest way.
Business plays to the same rules as gold prospecting in the Andes. Companies who deliver simple, bold innovations often beat those who have their heads down delivering incremental improvements through increasingly complex solutions.
Economist Joseph Schumpeter labelled innovation as “creative destruction” and this is exactly the result of companies who successfully use explosives. For example, Ryanair changed the face of European air travel by redefining the service and value model; Swatch changed the focus of the watch industry from precision engineering to everyday fashion; Ikea created a new way to retail furniture; and Apple are setting a new standard in personal computing through a focus on great design and ease-of-use.
The flip-side for each of these companies is that they have had to accept the consequences of their actions. Ryanair will never attract the premium customer who demands extra services, those who demand precision engineering will reject Swatch, Ikea doesn’t make sales to those who want pre-assembled furniture and Apple has yet to sell to the corporate market.
Growth and ongoing success requires us to take risks, however. The bigger, but often unseen, risk is to do nothing or to do little – just ask the UK car industry. As management writer Peter Drucker put it, “People who don’t take risks generally make about two big mistakes a year; people who do take risks generally make about two big mistakes a year.”
The bottom line
Where are you trying to be too clever in creating complex, incremental solutions when you could create more innovative solutions simply by using some explosives?
To find out more contact Stuart by clicking here or call +44-(0)1636-526111.