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You need to analyze your organization and culture to assess its innovation capacity with the same intensity as you do the rest of your business, warns Carol Franczek. Otherwise, you may find your firm suffering from the symptoms of “root rot.”

Recently, we had to cut down a beautiful oak tree in our front yard. It was about 150 years old and it died. According to the tree specialist, the tree was probably dying for about 10 years before we actually saw its decay. Ten years of giving us an abundance of leaves in the spring, acorns for the squirrels and chipmunks in the fall and now it’s dead. It made me wonder if it wasn’t true for companies as well. Is a CEO aware that a company is dying when it’s still providing a good harvest?

Many CEO’s are now focusing on innovation to insure continuous harvests. Innovation becomes one of the critical factors for ongoing growth. Take your pick of recent studies and all point to the increasing recognition by CEOs that innovation will be a key strategic imperative for long-term growth and survival.

Usually this focus translates to investment in new product and new services, Six Sigma and kaizen — all of which try to maximize the growth and margin of the harvest. But, what about the roots of the company and the environment that houses the organization?

I believe it is critically important for CEOs to diagnose their organizations with the same vigor as they diagnose their consumers, customers and markets. They do the latter because they are looking for insight that will drive strategy and tactics. They need to do the same for the former — for their own internal organization. They need to know where they have innovation strength, and where they have gaps, just like they do in the markets in which they compete.

Some executives are frankly uncomfortable with looking at their organizations in this way. This is true particularly if they have been in their positions for a long time and they no longer are enjoying their “grace” period on the job. Some are concerned that the results will show up areas that negatively reflect on their leadership. Others think that anecdotal insight is sufficient. I would argue that it’s better to know what to focus on then to remain in the dark. It’s better to have a benchmark to evaluate where you are and be able to determine what you need to do. I believe that this focus will reap far more rewards than frenetic attention on new products and services alone.

During the 1970s and early 80s, companies focused on advertising and promotion to build brands. In the late 1980s and 90s, they focused on productivity savings to increase margin. Now, companies are forced to compete on a global scale, finding resources and insights worldwide to grow their businesses. It’s complex and difficult, but I believe the only long-term insurance policy is to maximize the company’s roots — the potential of the people in an organization  — by providing the leadership, the skills and an environment that supports innovation. A diagnostic assessment is the first step that will put them on this critical path.

Carol Franczek is founder of The Innovation Practice, an innovation consultancy. For more information about The Innovation Aptitude Audit,  or other innovation services, please contact Carol Franczek at 847 786-4243 or email us at [email protected]

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