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Innovation in Legacy Companies

We have all discussed the demise of Kodak somewhere – at the dinner table, at a conference, in a meeting. Everyone uses Kodak as the anomaly – how can it be possible that a company like Kodak went into Chapter 11? Couldn’t happen to us! Charles Warner, in a recent Forbes article, discusses the unbelievable lack of innovation in the media sector. How is that possible you ask? The sector is undergoing significant transformation, and so innovation and business reinvention must be top of mind for all senior executives, right? Not so, says Charles. He sites a discussion with a colleague that goes something like this: “First, it’s almost impossible to generate innovation in an industry whose entire organisational structure, policies, and rules are designed to minimise mistakes. Journalistic organisations such as newspapers don’t tolerate mistakes very well. When I talk to friends who work at Google, Facebook, and several digital startups, they talk about “the team.” They embrace the notion that “only the team can win or fail” and talk about how they love working with their teams and at their companies. When I talk to friends who work at legacy media companies, I often hear, “I hate my co-workers; they’re so backstabbing,” or “I hate my boss; she tries to take credit for everything.” And why not? Legacy media companies’ reward and incentivise individual contribution and star power, not team success. The result is no innovation because of fear of making a mistake or a craving for individual credit.” As someone who delivers a postgraduate course on Business Transformation to MBA students at the Australian Graduate School of Management, discussions like this continue to astound me. However I have now come to the view that organisations that are unable to grasp the need for business transformation and execute change will be short-lived – much more so than before.

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