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Saturday
19Jul2008

Compliance and Innovation in perspective

Situation: Your organization is burdened by a series of new rules with which it must comply. All organizations in your industry are subject to the same rules. The simple solution is to identify the path of least resistance – the solution that creates minimal disruption. That solution will probably be predictable. It will meet the requirement and probably nothing more.

The path of least resistance is also the path of least responsibility for protecting long term stakeholder value. The predictable path is the one that trades short term compliance for future competitive advantage.

An innovative organization, however, will see the problem differently. Instead of a restriction, it will identify the emerging industry pattern and will find the path which creates differentiation. Exploiting this path leads to new opportunity.   

Bob Willard has authored numerous books on the business case for sustainability. He sees the shift toward green as the changing rules. He also sees a chance to innovate, to go beyond compliance and capture measurable profit.
Where the compliance head focuses on the cup half-full or half-empty syndrome, the innovator sees cup runneth over potential.  

Business is dynamic. Opportunities come and go quickly. You act or your run. Waiting for someone to set a new standard does not earn market share. Blind innovation, based on capabilities is not a strategy. It’s a treasure hunt. Innovation based on a realistic view of how rules and resources may change is strategic advantage.

In American football, the offense is always looking for predictable patterns in the defense. Once identified, it exploits that pattern, challenging the opponent’s predictability. 

Business is the same, minus the helmets and padding. When rules change the way the game is played, some will comply. Others will see and exploit the new opportunity. Superior muscle is a dumb defense. Superior ideas create a strong offense. And that defines the new definition of innovation: Strategy beyond compliance to create opportunity.

Globalization is the epitome of greed. Friedman focused on the tactics and failed to see the real cost.  The new success will be defined by those who innovate not necessarily by invention, but by implementation – shortening the supply chain, creating longer product life cycles, supporting rather than undermining the economic base, building life after life into the resources that become products, seeing beyond the end of the quarter and focusing on our responsibility to our community today and tomorrow. 

This shift in thinking is possible. Innovative companies are beginning to capitalize on the shift. Janine Benyus and Gunter Pauli recently described nature’s 3.8 billion year R&D project which provides us with inexhaustible examples for sustainable innovation.

The future will not be a reflection or an extension of the past. It is a world with new issues, new rules and new solutions. Compliance is for the meek. Sustainability through innovation is the responsibility of a new leaders.  

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Reader Comments (2)

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Tuesday, September 30, 2008 | Unregistered CommenterSaundra Mitchell

Really thought-provoking issue, to say the least. Which books would you recommend on this theme besides Blue Ocean Strategy? Half a year ago I borrowed the book "Circle of Innovation" by Tom Peters from the library. He went to the extreme when it came to innovative elements in companies -- but is it possible to have an entirely "innovative-minded" firm? There must be limitations, am I right? Or just the strategy must be innovative?

Anyway, great article, yet again!

Tuesday, October 21, 2008 | Unregistered CommenterGazdag, Gergely

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