Innovation Book Club: Boom!

It’s not that companies don’t embrace innovation. They just don’t take it very seriously. That’s where Boom! Deciphering Innovation: How Disruption Drives Companies to Transform or Die, by Lisa Hendrickson and Jim Colwick, comes in.

“We decided to write this book because we both felt that innovation is taken really lightly by the innovators,” Hendrickson, an entrepreneur and founder of Spark City consulting group, said in recent interview with HSMAI. “We see traditional business being chewed up through disruption, and innovators coming in and disrupting these spaces that perhaps have taken people most of their career to build. And part of the thing that is overlooked with innovation is, what are we leaving behind? Innovation has a creative destruction to it. We have to be able to understand, what do we want to keep and what do we want to innovate away?”

As Hendrickson and Colwick — a leadership consultant and managing principal of Integral Change LLC — noted in our interview, that question is certainly on the minds of hospitality professionals in the age of Airbnb.

When you talk about “creative destruction,” is that where the title Boom! comes from?

Lisa Hendrickson: It’s not necessarily that I feel like I’m blowing things up, although I’m sure that people would think that if you’re an innovation consultant coming in. In our book we talk about these forces that have come together in a unique and specific way that has created an ultra-disruptive environment. Oftentimes in the past there might have been a disruption in, let’s say, a technology platform, or in a particular process, but there wasn’t disruption in all these different verticals. You’re talking to me about hospitality, but we literally could be having the same conversation about automotive or government.

The reason why that’s happening is that we have this confluence of macro-trends that are really impacting the current environment. This is the reason why it feels the way it does. The earth moves when we have this kind of confluence, and it makes people very uncomfortable. Think about it in your own industry — Airbnb is now the biggest player in the hospitality space without owning a property.

Jim Colwick: I was just reading in Businessweek about Airbnb. In all these cities in Europe — Prague is a particular example — the local people are demanding restrictions on Airbnb because it’s raising rental prices across the entire marketplace. So, disruption rolls right out into the community, into society.

Hendrickson: That’s a great example of the earth moving for people who don’t even necessarily participate in the industry itself.

What are some of the mega-trends that are just causing such widespread disruption across industries?

Hendrickson: We identified really five big buckets. One starts with changes in demographics and social distortion. It’s almost like a barbell population. You’ve got all of these Baby Boomers who are older, who are holding onto their houses longer, who may be holding off on retirement, who are holding onto a lot of cash that’s sitting in one place. Then on the other side of that barbell is the Millennial population. What we’re seeing with them is taking a longer time to pay off student loans, taking longer to buy a first home, if they’re even going to buy a first home. What we’re seeing are these two opposing forces that are still shaping and transforming society.

Another force that we identified is globalization and market disorganization. One of the things that you notice is the difference between pre-recession America and post-recession America. Let’s talk about this in retail terms. After the recession, you started seeing growth of super-high-end luxury brands and growth of brands like T.J.Maxx. What got decimated were those middle and premium brands like Kate Spade and Michael Kors. Those brands really took a hit, because you’re seeing the squeezing in the middle class. We also have change in government policies, such as tax policy — when the government changes and creates instability for businesses, business does not like that. We have climate change and environmental uncertainty.

We’re in between things, which makes it uncomfortable. But on the other side of it is a new world of opportunities.

Who is your intended audience for the book?

Colwick: It typically would be someone like a CEO of a company that is not well versed in technology. They haven’t been standing in the center of it, watching it come toward them. Or it might be a mid-level manager who thinks they need to know something about it — they’re just kind of bewildered by the blizzard of information and the conversation that’s going on around it.

Hendrickson: We try to make things looks like we have our business together, but innovation is a messy business, and it’s hard to be able to have those two things co-exist —we’re in control of something and we’re out of control. Even though this is a business trend, it really is deeply personal. I think that so many innovation books lack that conversation for people, and we wanted to make it accessible, like quietly answering those questions for people

Colwick: I’d add that when people are going through change, there’s an immense amount of fear involved. One of the ways that you can help reduce that fear is to understand basically what’s occurring — by putting some labels and some organization and some models together where people can say, “Okay, this is what it is. It isn’t as strange as I thought it is.” Hopefully it becomes less overwhelming and gives them a chance to have essentially an emotional anchor and a sense that they know where they stand, or potentially stand, and what they can possibly do about it.

Is innovation best addressed at the macro level or the micro level?

Hendrickson: Innovation is different in every organization. Why? Because every organization has a different culture. I’m going to go back to Peter Drucker: Culture eats strategy for breakfast. If we ignore what has already been built in an organization and try to innovate outside of that, it will fail. It has to be taken on in a thoughtful manner where, number one, you have senior leadership agree that something must happen; and number two, there are some very high-level experiential things that need to be run — whether there’s design sprints or problem-definition workshops, and from there leaders can understand innovation inside of their own organizations and then plot a path.

Colwick: Innovation doesn’t necessarily have to be mind-bending in terms of its size and scale. Chip Conley, who created the Joie de Vivre hotel chain, had a practice of going around his hotels and seeing someone in the hall — a maid or someone else from staff — and asking them what had they done that day that made somebody else’s life better. That to me is a very powerful innovation, because it really can change a person’s commitment to their work. And you say it enough and it becomes a myth that goes around the organization that people believe in.

How can organizations open themselves up to the opportunities that disruption makes available?

Colwick: Organizations tend to mirror the point of view, the personality, of their leaders. If you are running an organization, then you need to have the kind of mindset that allows people to innovate, and help shield people who are innovators. People who are innovators are often shunned in organizations because they are pushing the envelope and they cause anxiety in other folks. You can change the ground rules and the social norms in an organization so it’s okay to do that.

Hendrickson: There’s huge opportunity when we look at that barbell to be able to engage with people how they would like to be engaged with. Some of the magic of the Airbnb is showing up to a place knowing it’s somebody’s home, and when they open their door you feel like you already know them. I think that that is where there’s opportunity for the experience generation — the Millennials. Another huge opportunity that the market is showing us is the idea of having no technology in the market. This ultimate luxury — having a technology fast for people.

Categories: Marketing
Insight Type: Articles