Preparing for the Supercycle of Innovation

Preparing for the Supercycle of Innovation
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Time to read: 4 minutes

In yesterday’s Wall Street Journal, John Michaelson, CEO of Michaelson Capital Partners, makes an excellent case that a new “Supercycle of Innovation" is imminent. Economic reordering historically follows a recession, and we are overdue for the fundamental restructuring that should have followed the 2008 recession. It's an important piece, not simply for the historical information provided, but for the positive mindset through which Michaelson views the economy.

Call it economic restructuring, disruption or innovation. No matter what you call it, it's coming and faster than most of us are consciously aware. Early last month my iPhone died on me on a Sunday afternoon before a flight to New York. I began to think through what I would have to go through without a phone for a week and it was practically impossible. We've become dependent on the smartphone in an unprecedented way, and it didn't exist ten years ago.

The question then becomes, how do we “prepare for a new supercycle of innovation?” And like strategy, the answer is simple. It’s the execution that is difficult.

Recognize, Accept, Embrace

The speed of change is only going to accelerate. The first step is to recognize and accept that this is true – that this pace of change is the new normal. While it is easy to see, accepting and embracing ambiguity as an opportunity to innovate and create is not.

Incumbent companies are at a disadvantage in that they have already invested in yesterday's infrastructure and methodology of working. The upstart companies are not wedded to the old paradigms of doing business. It’s why Uber can boast of a $68B valuation - larger than GM’s $55B without owning a fleet of vehicles. It’s why AirBnB is worth more than Marriot without owning the property.

Incumbent companies, if they expect to stand a chance in the future, need the leaders, as well as the rank and file, to recognize, accept and embrace this fact. I've been speaking more often about the need to build a culture of entrepreneurency within organizations. Embracing ambiguity is going to increasingly become a sought-after skillset, from sales all the way to the c-suite.


The second step is to find margin to invest. Increasing your operational effectiveness is the simplest strategy. Go ahead and feel free to drop some of that new found margin to the bottom-line, but I recommend that my clients reinvest 60-75% back into the organization to improve innovation.

As leaders, we need the time on a weekly, if not daily, basis to be still, to listen to what is happening in tech and the economy. We need time to do deep thinking and scenario planning. And our teams do as well.

Time is necessary, but not sufficient. You also need to invest real money in testing, listening to your customers, and innovating new products, services, and ways of operating that deliver increased value.


Extending not only the innovation but also the learnings from the attempts at innovation is the third step.

Taylor Valentine, Chief Invention Officer at Horizon Media, exemplifies this extend-the-learning approach. Taylor’s role is to drive invention throughout the organization via employee-led initiatives. As you would expect, many of these projects are not unqualified successes, and as a result, Taylor says that he is at war with the word failure.

“…what we saw is that employees didn't want to let projects go. It was a source of pride. Letting it go says, ‘I failed.’ It was the first experience that we had of the necessity of having hard conversations about failure being a positive and turning what their experience was into something that others can learn from, and of which they can be proud.”

High performers and their managers became concerned that if their project were not successful, it would reflect poorly on their record and reputation. Taylor’s response was to begin highlighting the learnings from all the projects, not just simply celebrating the outcome of the successful ones.

“…if we do it right, we can actually come out of here with an amazing story about what we learned. Even if we tried something for four weeks and we didn't make it. I want people to feel optimistic that they learned something about themselves, they learned about their limitations, they learned that they couldn't get out of their own way. Maybe they'll come back to it another day and figure that out.”

Extension is not merely about extending the “successful” projects to the rest of the organization but extending the learnings from every project. That requires the mindset, the processes, and infrastructure to support a culture that encourages innovation internally and is prepared to respond and adapt to external innovation and disruption.

About the Author: Bill Sanders helps leaders and organizations adapt, grow and thrive in rapidly changing environments. He is Principal and Sr. Consultant with Roebling Strauss, a operational strategy consultancy that specializes in delivering dramatic improvements in organizational effectiveness, Lead Link of the Finance Circle for Great Work Cultures, a community dedicated to creating a new norm for work cultures that optimize worker effectiveness and human happiness, and a C-Suite Advisor for the C-Suite Network, the world’s most trusted network of C-Suite leaders. Connect with Bill on twitter at @technacea.

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