The Innovation Crisis 2

if we are to be more innovative as a nation, one step forward is to recognize that we have fallen prey to "branch plant mentality."

Many businesses in Canada are multinationals. They are owned abroad–the U.S., France, Germany, Switzerland, Israel–and are operated as a part of a larger system. This can lead to dependance on the parent company to do the innovative work. The Canadian branch is directed to execute global strategy in the domestic market.

In many cases, the domestic organization is a marketing and sales force. Where there is domestic manufacturing usually the operations group reports to a regional or international supply chain organization and deals with it's own national headquarters as a client.

This can lead to a tactical focus only. Strategy, the home of innovation, becomes more about tweaking global initiatives to local markets. Productivity and profitability becomes the goal. Nothing wrong with a goal like that, except that after a period time, strategic thinking is no longer a competency.

It is muted and thwarted by complex organizational structures and bureaucracy that is difficult to navigate at the best of times. Innovative ideas, new products, services or processes often die within a bureacratic maze.

Eventually, people give up thinking outside the box because they can't get out of out of it to begin with. Frustrated, and with little incentive to keep going, many Canadian managers "stick to their knitting.

Those who cannot stand it eventually leave for smaller organizations that provide a more creative environment or they become entrepreneurs and start their own businesses. Good solutions but not without their difficulties. Approximately 70-80% of new businesses in Canada fail.

What to do?

Innovation needs to be a value that is encouraged by domestic and global companies. Smaller countries, like Canada, can be excellent test markets because of a diverse population and international awareness.

Many companies use Canada to season it's most promising executives for global leadership assignments. It can also be used to season it's most promising thinkers and ideas and become an innovation hub.

As well, Canadian entrepreneurs need support from financial institutions, angel investors and the government. Currently, our risk averse business culture keeps innovation muted. When creative people cannot gain the support they need dometsically, they leave the country for more hospitable jurisdictions.

Finally, the brain drain needs to be seen for what it is– a competitive threat.

© Patrick O’Neill 2012. All rights reserved.