If you work for a large corporation you most probably were already confronted with the importance of innovation several times in recent years. Some even call it a buzz word or overhype meanwhile. But just because “innovation" might get mentioned more often than in the past, does it present less value or significance?
It’s key to understand why it has always been important for organisations and why it will remain important in the future.
Here are a few general misconceptions:
- Innovation is not relevant as long as the current business is going well. A great selling product might make an organisation feel too comfortable and forgetting to challenge its own solutions on a regular basis.
- Innovation and creativity can’t be fostered anyway. Many companies believe that you can neither demand nor measure creativity or innovation and hence, should not actively pursue them. But creativity and innovation are different. Creativity is the gift or skill to imagine new ideas and ways to shape a product, process or business. It is indeed difficult to be creative on-demand. However, innovation is an established concept about testing and implementing existing ideas to foster an outcome (either success or failure). If you don’t create an environment for innovation you are at best collecting many ideas just for the drawer.
- Failure is not an acceptable outcome and should be managed away in the beginning. Innovation often touches on new ground. If the outcome was positive for sure and could be predicted the proposal would not be that innovative anyway. Therefore, failure is one side of the innovation coin.
- Innovation is about technology or a new break-through product. We all know products or technologies which have changed an industry or the way we perform tasks. However, innovation is more than technology. It includes business models, processes, eco systems or combining existing services in a new way in order to enhance value for our customers.
8 points how organisations should approach innovation:
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Embrace innovation and understand that it means to keep moving in order to stay ahead of the game or at least to not fall behind. If a firm stands still, it
risks being overtaken by somebody else in a moment when it is least expected. History provides sufficient examples and among various industries
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Once you work on an idea, don’t rush into the solution finding too quickly. Instead spend sufficient time in framing the key challenge. What are the real pain
points of your target customers? Why they like or dislike a current situation?
I remember a real case from a US based consulting company. A school asked to help improve the canteen food which kids seemed to dislike for lunch. Instead, kids preferred the snacks from the vending machines or didn’t eat lunch at all. As it turned out, it was neither a food quality problem nor a money challenge. It was simply a logistical issue. The waiting line to get lunch was so long, that many kids just didn’t make it on time during lunch break. Very soon they gave up and didn’t go to the canteen anymore. The solution to the issue was to establish a pre-order system with multiple pick-up lanes so all kids had their lunch boxes in less than 10 minutes. Understanding the root-cause is critical
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Set clear and realistic objectives. It might be too far fetched to ask each employee to come up with an idea and test it through an innovation process. But
each department head for example could be given the objective to present one innovative product or service each year. This would enable to funnel sub-objectives down as
required and assure that the department dedicates resources to the most promising idea.
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It’s ok not to know the future. The job of innovation management is not to predict the future but to create the process and environment that
enable to discover that future.
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Accept failure as a possible outcome from which you can improve. Failure and success are two sides of the same innovation coin. You need to embrace one in order to get
the other.
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Define where you can or want to accept innovation. Failure is not good for everything. A hospital, wealth advisor or engineer might not survive for
too long with too many failures. So its imperative to define the boundaries in which you want to run your innovation space.
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Innovation takes a little while. Therefore, define a multi-year commitment. You will most probably experience an overall performance drop first. Because innovation will
also produce failure it might not generate your big hit right away. But it’s the price for a performance lift later on. If you take the first year measurement point as your
decision base for continuation, your innovation efforts will not last for long. It’s like your first car driving lessons you conducted in order to expand your
mobility later on. You were most probably not too successful in the beginning. Only having had the long term goal in mind kept you going. It’s the same with innovation.
- Don’t make the innovation process too complex. You don’t need much money or a complex strategy. Innovation in its core means: try something quickly , find out what worked, learn and improve or take the freedom to stop it (build -> measure -> learn). It’s often sufficient to establish a small effective expert team that guides ideas through an established innovation process.
The reward of good innovation are new or improved solutions that keep generating value from your customers point of view. And what should be wrong with that?
Chris Frey @chrisfrey.com
