If you type the word “innovation” into the search window on Google books, you get more than 54 million hits—a testimony to how the pursuit of innovation has taken hold as the prime business imperative of the 21st century. But is innovation itself really a solution?
On a recent panel I moderated in Taipei, Ming-Je Tang, Vice President for Finance Affairs and Professor of International Business at National Taiwan University, took up this question. He listed a number of companies that were home to some of the most miraculous innovations of the 20th century—from mass production assembly lines to the personal computer. The thing they all had in common in addition to that innovation was that they are all either now struggling—or gone. They are victims, he says, of the “innovator’s curse.”
Why was this? “They failed to transform themselves to meet new technology breakthroughs,” says Tang. It was not enough to just produce innovation; they needed to continually adapt to market shifts and trends. So the real imperative for companies in today’s fast-paced economies, suggests Tang, may be the ability to respond to change.
This was borne out by another panelist, Taiwan Cement Chairman and CEO Leslie Koo Cheng-Yun. “At Taiwan Cement, innovation is not the buzzword. The buzzword is change.” At his company, they use change to keep themselves dynamic, looking beyond their own industry to find new technologies and business models that will shake up how they operate. “We are changing every day and that makes us innovate,” says Koo.
It’s not that innovation isn’t important. Rather, it’s important to recognize that change—whether it’s the rise of digital technology or the rise of a market like China—is the driver of innovation. “If you look back at the IT industry in the past 60 years, every 15 years there is a big paradigm change—how can we transform ourselves to embrace these new opportunities?” says Chaney Ho, President of global technology company Advantech and another member of the panel in Taipei.
In the face of such disruption, the answer may be simpler than we think: people.
“Universities can’t prepare you with knowledge for the rest of your life,” says Tang. “We must produce students with the ability to manage change. We must teach them to learn how to learn.”
So while innovation—and the culture of innovation—is critical, developing the talent who can thrive in that environment is just as critical.
“People are the key,” says Ho, “because people make innovations.”
Gary Coleman is Managing Director, Global Industries, of Deloitte Touche Tohmatsu Limited. He is a member of Deloitte’s Global Markets Committee and is the lead partner in Deloitte’s strategic relationship with the World Economic Forum. Follow him on Twitter @gcoleman_gary.