Innovation is one of those terms that people through around way too much. It’s like success and goal setting or even love. One of the things that I stress to my students or anyone that will listen to me is, “How do you know you are being innovative?”
Answer
The simple answer that people give me is they don’t know… People (it’s in their nature) have a very difficult time determining between an idea they personally like (especially if they have launched the idea and are following their dreams) and an idea that is truly innovative. That’s where creative destruction comes in.
Destruction
The term was developed by an economist in 1942, Joseph Schumpeter and brought to my attention by Freakanomics radio (http://freakonomics.com/2009/03/13/creative-destruction/ ). The basic tenet of the idea is that innovation will replace either tasks or entire jobs. On the outside of this idea it looks like robots and technology is taking of the world. Well… maybe not the world but in the short-term the downside to creative destruction is that people lose their jobs. However, when these jobs are lost the tasks and jobs that replace them are always better with a higher pay and better working conditions. I was talking with a group of college interns last week and in an effort to make my point, because they weren’t too excited about being innovative and people losing their jobs, I made the point that by the simple fact we were all sitting in this room (air-conditioned when it was 90 degrees outside) talking about ideas and me trying to motivate them to business success that we were living the overt positive outcome of creative destruction. I asked them, “what do you think you all would be doing if it were 100 year ago…” I didn’t let them answer and I said, “no, how about 50 years ago?” (there was any easy argument for 15 years ago). After a slightly longer than expected pause someone said, “we wouldn’t be here”. Which is true. Most would be working in fields or a factory and the lucky few would have been in an office doing manual labor. That’s creative destruction.
Point
The more destructive the idea, business or product the more innovative. Creative destruction is a measuring stick of innovation.
About The Author:
Christopher Elmore has written 8 books, countless articles, lectures at UNC – Charlotte and travels around the country speaking on the topics of startup success, sales, presentation skills, change, entrepreneurship, accounts payable and payment automation. Having deep startup and entrepreneurial experience, Christopher was one of the six people who started AvidXchange in 2000 and continues to work in the business today. If you hire Christopher to speak or teach at your company or event… you won’t be sorry! Request a media kit or contact us for more information
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Great post and encouraged that you are enlightening your students on the advantages of innovation. I agree Innovate and FinTech are two terms that are used all too often in the Financial/Payables industry.
I agree, that some people only focus on the negative aspect of a ‘reduction of headcount’, the upside is that those individuals can now be cross-trained or deployed to do more value added tasks that contribute to a superior customer service or bottom line. while also growing personally and professionally. These concepts aren’t mutually exclusive to one another.
Since I started in the AP/AR international remittance industry, I always thought my goal is to work myself out of a job through automating static tasks, processes or procedures and it actually inspires me, it doesn’t discourage or dissuade me.
Thanks for the perspective!
Creative destruction is a good thing because we live in a world that is always changing to the better and to do things easier, cheaper and faster. We are moving toward less labor jobs and more computerized systems jobs.