Business & Innovation: 4 points to consider

Companies long for change. Particularly in this present time, when we face digital transformation and the explosion of advanced technology. Buzz words such as “innovation”, “technology” or “entrepreneurship”, “AI/VR/AR” are everywhere, and that’s awesome! In fact, it’s so great that we’re getting a dopamine rush so hight that it could blind us. — Because with innovation, it always seems we will always find our way out. Until we don’t.

Indeed, some companies and individuals will feel overwhelmed by innovation. The reason for this is that we still consider change and innovation in general as challenges. In order to embrace innovation, we need to acknowledge that companies are still struggling with basic changes such as implementing new processes, HR initiatives, changing business models, etc. As a result, companies will face difficulties with innovation. And even more so when they were late in the innovation game in the first place.

Why can we still see companies struggling to achieve basic changes and how they can do a better job at it? Here are four explanatory points on some challenges companies will experience when they face innovation and change, plus additional pieces of advice on how to solve or reduce potential resistance.


1. The shift in roles

In one recent article published in the Daily Mail, the author Francesca Hornak discussed the roles we embody during holidays gatherings. From the “clever” one to the “pretty” one, each individual plays a part during festive family dinners. The reason behind it is that “stereotyping enables us to anticipate situations and make quick assessments”, as “people cope better when others’ behaviour is predictable”(1). To some extent, it’s the same with companies and business roles.

While business titles and seniority levels give basic guidelines and assess employees’ roles, there is one additional role at stake: the one defined by interactions and culture within a company. For example, you are officially the executive manager, but implicitly you also are the information provider in your department. When innovation strikes, changes arise within company settings challenging those implicit roles at their core.

Change can considerably affect the stability of a company and employees can be reluctant at first. Not only because changes move the core identity they hold within a company (their working persona), but also potentially their current position (their legitimacy). As a result, employees will oppose resistance to new processes, new employees, and new work assessments. If the phase of change doesn’t last too long, processes will ease themselves eventually and new positions and implicit roles will be implemented. But during those challenging times, the hours at the desk could be rather unpleasant.


Our solution: Considering such psychological effect, working on new solutions is key. We need to define new standards when it comes to “positioning” employees. By enforcing them to identify to their title/position/salary, they are bound to experience some bias which will prove to be particularly challenging when changes occur. Also, companies could benefit from creating in-house turn-over systems or assessments to let employees discover and experience other positions in the company. Such solutions can increase feedbacks, challenge status quo, enhance understanding and ultimately develop empathy at work. As a result, people will feel less challenged by changes as they will be able to see themselves as competent and adaptable employees in most cases — and not only as a title printed on their business cards.


2. The “Sunk Cost Trap”

The “sunk cost trap” refers to “the tendency of people to irrationally follow through on an activity that is not meeting their expectations because of the time and/or money they have already spent on it.” (2) In the workplace, this effect can emerge when employees take on assignments demanding time, concentration and creativity. Such tasks have the power to engage employees, enhance their overall satisfaction and their sense of contribution as it increases involvement and attachment to projects.

Time, concentration, and creativity are scarce and demand cognitive load. When a project is high on those variables, a sunk cost effect can surface and prevent new implementations or changes from new directions in order to preserve or achieve the initial project. The result of this is unnecessary time spend by teams to find new ways or directions, which will further not be accepted at the profit of past actions because of prior investments made in time, cognitive load, or money. Ultimately, this effect represents a way to have control over what can be perceived as a “disruption” (aka innovation) as it provides reassurance when facing uncertainty.


Our solution: Enhancing in-house feedbacks within teams coming from various departments while completing a project could provide external insights while depersonalizing the task and emphasizing on the bigger picture. When companies face changes, this exercise can help people not to remain stuck in one-sided solutions as this can potentially represent a challenge on its own. Prior to such initiative, it is mandatory to put in place a safe environment for people to give the most effective feedbacks, to be able to receive them and to make the best use of it.


3. The “skeleton in the closet” effect

As human beings, when challenging times come, true colors emerge. This applies to companies too. When embracing a changing phase, all processes (or their absence of) will be brought to the surface: that is the “skeleton in the closet” effect. At its core, this phenomenon is highly positive since change — when achieved successfully — should bring significant improvements to the company. However, the effect can also make visible what was initially hidden: inefficient processes, toxic work relationships, mistakes in product development and administration. Not only those bad practices will affect employees because they will have to work with “altered” tools and processes, they will also have to remain adaptive to the new changes initiated by the innovation itself adding a new layer of difficulties.


Our solution: Start slow, but start smart. Quite often, companies engage themselves in push strategies where they ask for PR/MarCom campaigns, product deliveries, recruitment processes within a short period of time. While we can all agree that tight deadlines can be effective as they help to find solutions quickly often enhancing innovative outcomes, a brand without solid foundations will suffer from such strategy. For this reason, new generations of CEOs could benefit from slowing down. Indeed, creating companies by working on their core foundations could help further innovative implementations, facilitating the creation of a culture in favor of healthy ongoing changes (instead of the rock the boat type of changes every now and then). Additionally, innovation could be achieved more efficiently when anticipated. To this end, the McKinsey Three Horizons Model could be a useful tool since it allows companies to foresee areas of innovation while considering their present state and ongoing challenges.


4. The brand identity confusion

Directions may change, new definitions may arise, it’s all part of the voyage of entrepreneurship & business. However, while some endeavors and new positioning are more challenging than others (for example, think back about the amazing article from Inc. about the fall of GoPro), one can observe that innovation will affect branding and the overall brand perception. As a result, branding, communication, and all those sexy topics will have to follow closely business advancements. When left in the dark, such departments will not survive from the changes and innovations implemented in the business. This, even when innovation was made effectively. Why is that? Because they eventually will have to promote the change, communicate about the new product and services, making sure customers follow and eventually advocate the brand.


Our solution: Make sure to understand that whatever innovation or change you’re going through, marketing and communication are going to be affected. Each company going through important business changes will need new MarCom materials or even a rebranding to illustrate new directions. Keeping such departments in the loop will not only make employees more receptive to change but additionally, they will have processes in place to face the “outing of the new” of the company.


Whether in business or in any other area, we all have the same question: how to face change? Because it affects all of us, we need to understand the underlying processes of change and innovation to be able to embrace their real benefits. Without doing so, we face the risk to leave people behind which will only affect innovation itself. By taking into consideration the human factor instead of only focusing on the technological aspects, companies could create win-win situations which will be rewarded in the long run.