Want Innovation? Try Adding Some Empathy

“Stop Calling It Innovation” by Nadya Zhexembayeva

Harvard Business Review, February 19, 2020

*****

This piece makes a very interesting observation . While CEOs love innovation, most employees hate it. For them, innovation is a bad thing - at best, it means more work. At worst, it means they’re out of a job.

Citing Nobel Price winning behavioral economist Daniel Kahneman,, Ms. Zhexembayeva notes:

“The ‘lizard brain’ — the primitive part [or our brain] that is all about fear, fight, and flight — is nearly always in charge of our decisions. So while you might use the word ‘innovation’ to mean ‘improvement,’ employees are hearing alarm bells ringing ‘Danger! Danger!"‘ and there’s no time to put a positive spin on it.”

Her answer? Change your language. Specifically, find words that speak of continuity and benefit.

My answer? Change more than your language - change your approach. Think about whether your “innovation” will improve your company, your employees, your customers, and your community. If it doesn’t, recognize that you don’t yet have the right answer.

Since the 1980s, the concept of “shareholder primacy” — the idea that a company’s sole duty is to maximize shareholder value — has been dominant. Companies have been able to do well without doing good,, at least in the short run.

To a significant extent, that came from profiting off of externalities (like a company’s impact on the environment) and shifting risk onto individuals. Employees today face unprecedented levels of volatility in their income and expenses, and lack basic protections like sick leave, a steady paycheck, affordable housing, or decent health care.

I don’t think short-term approaches to corporate profitability were ever sustainable. After all, 70% of GDP comes from consumer spending,; our economy depends on a functioning democracy; and the costs of a degraded environment ultimately come home to roost.

But even if short-termism worked for a while,, the world is changing. Employees, customers, and a growing number of shareholders are increasingly holding companies accountable for their impact.

After all, the point isn’t innovation. That just means doing something different.

The point is innovation that creates real value, and that’s done in a way that shares the value that’s created with all stakeholders.