Organisations that make creativity and innovation central to their existence survive and succeed in the long run. In the 1800s, when New York’s streets were crammed with horse-drawn carriages, the city was threatened with an overwhelming horse manure problem. The city almost didn’t survive the ecological disaster, but out of the mire there was a positive result. The crisis led to the need to reset the clock through a massive new technological innovation — through the mass production of the new machine known as the ‘automobile’. The innovation was introduced just in the nick of time, but as a result anyone involved in the horse-and-buggy industry would have lost their income, if they hadn’t kept abreast of these changes. The pace of change, not only in cities but also in organisations, is now so fast that it is essential to innovate to stay ahead. Theoretical physicist Dr Geoffrey West, who has studied the growth of cities and compared them to the growth of organisations, believes that innovation is critical for the survival of our civilisation. West believes that if you are going to have open cycles of growth (as in our current capitalist system), you must have innovation to support them. But he cautions that “There is a clock that’s getting faster and faster. And so you have to innovate faster and faster in order to avoid the collapse,” warns Dr West. By examining the life and death cycles of organisations, Dr West has noted that there often needs to be a point where critical intervention is necessary if an organisation wants to keep on innovating and, in the long run, survive. For large corporations, the growth typically stops at the same value — about half a trillion dollars — or 40 years or three generations. Up to this point, the sigmoidal curve indicates that although sales might have been steadily increasing, the ratio of profit to sales has been steadily decreasing. It is usually only at the point that an organisation first sees the writing on the wall that they cut back on spending on innovation, for example limiting research and development budgets, and yet this is exactly the time when it is most needed. The lack of foresight organisations usually demonstrate at this critical stage in their life cycle is what ultimately kills them. When companies allow themselves to be dominated by bureaucracy and administration rather than creativity and innovation, as West says is inevitable, they are suffocated by the essentials. Because innovation emerges out of the structural tension between the way things are and the way we imagine things could be, the gap between what people can do today and what they want to be able to do is driving change beyond anyone’s expectations. Continued innovation, therefore, needs to be an essential part of the DNA of your organisation.
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