When was the last time we heard of a Pakistani business doing something different? Something which has not been done before? My memory fails me, perhaps for my age, and I would happily stand corrected. But in over 30 years of partaking in and observing our businesses and companies, I can’t recall any time we had provided the world with a new idea, a business model, a strategy, or anything. Perhaps, as individuals, we feel it is enough of a risk to be living and working in Pakistan and therefore why do something different in work or business? The modus operandi is to survive.
However, I contend that Innovation needs to be at the centre of our businesses, the driving force, so to speak. If your organization cannot continuously reinvent itself, it will gradually become extinct. I understand that this subject deals mostly with ambiguity whereas, as leaders, we are always trying to create more certainty in our business. This creates tension and anxiety in our decisions. But then, this is exactly the kind of uncertainty our leaders should be trained to deal with. We should be able to place bold bets in the face of uncertain outcomes and should be able to persevere with our decisions.
Take any of the global giants today and you will find this to be the common factor in their success. Could Tesla, Apple, Google, Amazon and many other businesses exist without their leaders making a high-risk bet on a new technology, a different business model or creating a new market?
Given innovation’s critical importance in driving growth, it is a subject worth spending time over. When we imagine Pakistani businesses, think of the largest sectors such as textiles, banking, chemicals, or even information technology. Where do we see evidence of bold moves? On the contrary, we continue to do the same things in the same ways that our forefathers did. Or we borrow ideas from somewhere else and copy the same, in droves.
“Bher Chaal” – doing the same things which others do, is the innovation strategy for most Pakistani companies.
What do we fear?
In the business world, the fear of financial loss or its impact on our careers is the biggest fear and if such worries continue to exist for long periods at the topmost levels, we can imagine risk aversion leading to mostly continuation of status quo. If people are insecure that they will lose their wealth or their income for taking risks, it is likely for the business to decline over time.
Another barrier to innovation is dealing with uncertainty and its accompanying loss of control. Such fears trigger the pursuit of more certainty in outcomes and hence the desire for guaranteed returns! Sounds familiar? In most Pakistani companies, leaders seeking more control over outcomes end up prioritizing incremental steps that they perceive as less risky but are also much less ambitious.
We also fear criticism, much more so than other societies. This is another big hurdle to innovation as people don’t wish to be seen doing something out of the ordinary. Group conformity leads to a lack of innovation and therefore, sadly, to mediocre outcomes.
Such fears have caused value destruction in many sectors. For example, in the Automobile industry in Pakistan, the traditional players, despite having access to the latest technology, continued to play safe and sell obsolete engines in this market to protect their existing profitability. Until recently, when new producers entered the market and started hurting their sales by offering new hybrid and EV engines packed with superior options!
Or take the case of a commodity chemical business who allowed new entrants to enter the market by its decision to grow incrementally instead of catering to the entire market demand. This eventually led to it losing market share and pricing power.
The retail apparel industry in Pakistan is a classic case of everyone selling the same products with negligible differentiation. When you take off the label, it is impossible to tell the brand. This group think has sadly led industry leaders to follow the crowd, much to their own detriment.
There are scores of similar examples of missed opportunities and value destruction which has impeded profitable growth across many sectors.
How can this be solved?
Businesses wishing to build a thriving culture of innovation need to embed it within their organisations. First, they need to build processes which allow disagreements with leaders/owners to take place. And this needs to be cascaded to the lowest level of employees. Pakistani businesses wishing to innovate must get out of the God syndrome attributed to owners and bosses. It is so prevalent in our businesses, bordering on the scale of a rampant sickness.
Second, companies looking to innovate need to have people who are willing to challenge the status quo. Stop hiring yes men. So many of the people in leadership positions in Pakistan are born bureaucrats who practice the “cover my backside” management style. They will need to be replaced whenever the business looks to innovate. And once the right leaders are on board, it is up to the leadership teams to build optimism and consistently encourage risk-taking by framing innovation as fundamental to the organization’s success.
Third, establishing rituals is important to make innovation the norm rather than an occasional endeavour. Leaders in Pakistani organizations don’t invest enough in establishing routines such as innovation days, hackathons, and meeting-free days that senior management lead or at least participate in to signal innovation’s central role. Add to these rituals, the conferring of recognition and rewards on innovators which will enable the organization to provide incentives for innovation.
In my opinion, it is this cultural piece which has been missing in Pakistan for the longest time. Businesses cannot innovate via innovation departments or when leaders try to become the biggest innovators themselves. It has to come from everyone, from the lowest to the highest rungs of the hierarchy, or it will not happen. The Owners and leaders role is only to create the right environment for this to happen.
By building a sense of belonging and safety through a shared commitment to innovation, companies can assure employees that it’s ok to experiment, ask questions, and provide feedback.
By having a sense of psychological safety, an innovation-centric purpose, and explicit encouragement and rewards, leaders can help employees at all levels find the courage to risk failure in pursuit of new and different solutions.
One of the best known innovators of yesteryears thought about innovation in a very different way. Thomas Edison famously said about his experiments, “I have not failed. I’ve just found 10,000 ways that won’t work”
