A metaphor that has become common in business planning is the need to create an “economic moat” to protect your competitive advantage. The economic moat is any method the company uses to maintain its competitive edge.
There are numerous moats that exist in businesses. There are “process moats” surrounding functional areas (in other contexts called “silo’s”) that protect work activities from outside influence. There are “social moats” around groups that protect members from uncomfortable interactions with non-group members.
The most consequential moat is the “stability moat” that supports execution and business performance. The stability moat protects the status quo. It is the stability moat that is most responsible for making innovating activities ineffective at delivering innovations.
Innovating is purposefully changing the status quo in the market, customer, user, business, and / or organization by introducing something new. Managers maintain a stability moat to protect short term performance from the uncertainty and instability associated with change.
Innovating isn’t easy because of the ubiquitous nature of uncertainty. Uncertainty is doubt characterized by unpredictability, indeterminacy, or indefiniteness of result or outcome.
Uncertainty affects a business in three ways.
1. It requires the skill to make sense of ambiguous situations through probabilistic judgements, distinguishing between possible and probable outcomes.
2. It exposes the risk in decision making, causing both risk averse and risk seeking decisions.
3. It generates more uncomfortable than comfortable emotions, which influence people’s motivation for taking action causing change.
Every business leader knows that, sooner or later, he must innovate (i.e. change the status quo) to ensure longer term stability and business survival. The idea of changing other’s status quo for your benefit is exciting. But the idea of changing your status quo can be pretty uncomfortable because of the uncertainty associated with changing. Successful innovating requires reducing uncertainty.
Agile InnovatingTM identifies the sources of uncertainty at each step of the D8 Infinity Process. Systematically reducing uncertainty through-out your project, A-I provides the methods for getting past the stability moat to make innovation the norm.