💎 DESIGN: Sharpening Your Edge

As a new team leader or manager, it can be tempting to focus solely on short-term goals and immediate results, especially when faced with cost pressures and resource constraints. However, neglecting to invest in innovation can have severe consequences for your team and organization in the long term.

The concept of "not eating your seed corn" is a simple analogy that I’ve used time and again to highlight the importance of preserving resources for future growth and success. Just as a farmer must save some of their harvest to plant the following year's crops, organizations must allocate resources to innovation and development to ensure their long-term survival. Simple.

Innovation is crucial to staying competitive and relevant in today's fast-changing business landscape. Without investing in innovation, organizations risk falling behind their competitors and losing their market share. Additionally, failing to innovate can result in missed opportunities for growth and profitability.

"Profit is a genuine cost, the cost of staying in business, the cost of failure in which nothing is predictable except that today's profitable business will become tomorrow's white elephant"—Peter Drucker

In short, you can’t cut your way to growth and profit is not a guarantee. Organizations must be prepared to adapt and innovate to survive and thrive. Not easy.

Protecting your seed corn

As a new team leader or manager, it is your responsibility to ensure that your team and organization prioritize investments in innovation and development, even when faced with near-term challenges and cost pressures.

Emphasize the importance of preserving resources for future growth and success, and encourage your team to adopt a long-term perspective when making strategic decisions. Simple to understand, not easy to execute.

Here are some specific actions and exercises you can take to prioritize innovation and development:

Become multi-lingual, learn how to speak P&L as well as or better than your CFO
- Become fluent in CFO speak. There are dozens of classes, workbooks, books, YouTube videos, etc. that you can take right now to increase your P&L acumen. Pick 1-2 and get started today, you don’t need an MBA. (Not throwing shade here, it’s cool if you have one.) And stay current. For example, here’s a one-week sprint from The Morning Brew*.
- Enroll your Finance & Accounting (F&A) leaders and colleagues by having them regularly teach your team on how to communicate in P&L terms, especially if you’re not a finance team leader yourself.
Make it “hard to cut” by work shopping the cost of not innovating with your key stakeholders, decision makers, and influencers.
- Use Red Team Thinking (RTT)* exercises like Influencer Engineering to first identify critical stakeholders, decision makers and sponsors. Then further enroll them with RTT exercises like Assumptions Challenge, Alternative Futures and the Devil’s Troika to illuminate the cost of cutting.
- Build and regularly share your Return on Experimentation (RoEx) workbook (coming soon!)
Be visible and consistently communicate the importance of innovation by using external and/or benchmarks.
- Explain to your team and organization how innovation can contribute to the long-term success of the organization. Make this topic a regular discussion point in your value-add team meetings.
- Share success stories and examples of companies that have successfully innovated to stay competitive amidst the siren call of short-termism. You could for example compare your Innovation Spend / Net Sales ratio, or Return on Innovation Investment, versus your key competitors and / or your category averages. How does it compare? Where do you want to be in the future? A leader or a laggard?

I can’t guarantee that by taking these actions you will assure that your organization is positioned for long-term success and growth. You will however be planting the seeds of doubt (pun intended) when your team or organization is at the crossroads of sacrificing the possibilities of the future for the pressures of the present.

Photo courtesy of Midjourney. Prompt mine.

As a team leader or manager, it is your responsibility to ensure that your team understands the importance of not eating your seed corn and prioritizing investments in innovation, even at the cost of short-term profitability. Simple, not easy.

What is the one thing, the one action that you can make to build your and your team’s P&L language capabilities, create a coalition of supporters, and/or communicate the importance of sustained innovation investment?

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*I want to be transparent and let you know that I DO NOT receive any compensation for the recommendations I make in this newsletter. However, please note that some of the external sources that I recommend may be training programs that I have used and/or found useful. My goal is to provide you with information and insights that will help you make informed decisions.

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