According to Wikipedia, Innovation in its modern meaning is “a new idea, creative thoughts, new imaginations in the form of device or method”.
Innovation is often also viewed as the application of better solutions that meet new requirements, unarticulated needs, or existing market needs.
Look in the mission statement of most businesses – tucked somewhere in there, either in its actual form or its many synonyms, is the word “innovation”, or its most similar word, “creativity”.
Most entrepreneurs may want nothing more than being perceived as innovative or at the cutting edge of something disruptive. But, just as hanging photos of nutritious meals on the walls of your kitchen does not make you dish out nutritious meals from your kitchen, innovation will not come from just talk. Innovation is an active word and it takes work and practice to become innovative.
Discussions about innovation are often made difficult because people are unclear about the exact meanings of some key terms. In particular, there is confusion about the difference between creativity, innovation, and invention.
Let us start with some definitions:
Creativity is the capability or act of conceiving something original or unusual.
Innovation is the implementation of something new.
While Invention is the creation of something that has never been made before and is recognized as the product of some unique insight.
Like many other businesses out there, you may find innovation to be a valuable trait that should be identified with your business, but your corporate culture may be steeply anti-innovation without your even knowing it. Read up on how to adjust your company culture here
This is not surprising, as creativity and a culture of innovation does not pay in the short term, and most businesses are obsessed about cost, efficiency and short-term metrics that will have an immediate impact on the bottom-line. Hence, the body language of the organization may just shift the focus on pushing short-term metrics up, with expectations of management focused on the need to do more with fewer resources. So, more structures are put in place to improve stability, rather than innovation that could end up being a time waster.
But it is important that business founders keep in mind that the strategies required to grow a business are not the same with what is required to keep the business from going, well, out of business. And, when one pulls to the left to ensure stability and predictability, it is important to have a measure of rightward push to foster an environment that can produce an innovative leap instead of just a gradual incline of improvements.
A business that focuses on the short term will likely get short term results, while a business that focuses on both short-term metrics and long-term innovative practices will embed long-term sustainability and ongoing profitability into the business.
This awareness requires a shift in the mindset of the business owner and the willingness to play at the fringes of uncertainty and risks, albeit at a measured extent. The business climate now in virtually all industries is too competitive and dynamic for any business owner to assume that business can go far just by playing it safe. In this knowledge and sharing economy enabled by the internet, your competition may even be from the other end of the globe, which may spell doom if you are just another local player.
This blog post will explore how you can infuse innovation into the culture of your business to ensure that you stay at the head of the pack no matter how many winds of change blows on your industry. While innovation comes with some risks, not innovating is even riskier. This post will present you with a measured manner of planning and implementing innovation to foster a creative environment for your business.
You cannot force innovation to happen
This needs to be said.
Most companies that attempt to implement an innovation program at their business fail.
What are the unsuccessful CEOs doing wrong that is sabotaging the innovation efforts at their businesses? Something to keep in mind is that innovation is not something that you turn on like a switch. It takes a gradual effort for you to seed an enabling environment for innovation and creativity to thrive. An innovative culture is one that supports the rapid creation of bold ideas and the seeking of creative ways to make things that are already functional better.
Sadly, when some entrepreneurs start an innovation program in their businesses, they expect immediate results which sometimes end up in their eventually micromanaging the program to death.
However, just because innovation should not be micromanaged does not mean that business owners are supposed to completely hands-off control. An innovation culture is one that fosters both the creation of innovative ideas and the implementation of those ideas. Hence, leaders have a responsibility to ensure that their employees see innovation as a core aspect of how business is done in the organization. You can’t achieve that without some element of oversight, measurements, optimization and strategy.
See innovation as a skill
Consider innovation as a competency that can be studied by anyone who joins your team and applied systemically.
Innovative companies treat innovation as a core skill like they would treat skills like leadership and integrity. Companies that are serious about their innovation culture make this a core part of job interviews to ensure that candidates coming in have a mindset of trying things out, or at least are willing to imbibe that mindset.
Larger companies may see the need to have innovation experts within your teams to guide them on their implementation path and enable their success. The role of these experts would be to conduct periodic or even regular trainings on creativity and innovation practice, and steer the innovation strategy of the organization in the right direction.
Additionally, you should incentivize innovation within your organization, both in terms of results from innovative practices as well as of the effort that employees put to be innovative.
See Innovation as a competitive edge
Businesses are always faced with the challenge of finding some way to engrain competitive advantage over their competitors. Finding that way may often be the difference between the success of the enterprise, and certain failure. One sure way using a competitive advantage in today’s hyper-digital and connected world is by using innovation.
Innovation is the act of being one’s fiercest competitor. That is why it is so difficult to imbibe it as a culture. If one does not innovate to stay ahead, one’s underbelly is opened to the sharks and the results can be devastating. When others out-innovate your business, it could lead to severe job losses if not an outright closure of your business. Remember, candlemakers did not invent the lightbulb, neither did horse breeders invent the motorcar, nor did the postal services invent the email. That is why creativity and innovation is critical in running your business. Horse breeders may have been focused on the horse breeder down the road, not seeing clearly where the disruption would come from.
In hindsight, we all have foresight. The question is; would you have known what to do when you are distracted by the day to day running of a complex organization? Many established businesses struggle to innovate out of fear of ruining a good business. They follow the adage, ‘don’t fix it if it isn’t broken!’, and that leads us to the next topic we are going to address.
Stop Doing What Works
As radical as it sounds, this is where most innovative companies start out. An attitude of dissatisfaction is inevitable if we are to truly implement a culture of innovation in our organizations.
This is what Joseph Schumpeter called creative destruction. The endless cycles of product and process creation which see new products replace older ones. He coined that term in 1942 and described it ‘the essential fact about capitalism’.
Let’s talk a bit about this.
If you were a competitor looking to upstage your industry, what would you do? It is likely that you would consider your existing products, services, and processes with a view to seeing how they can be dramatically improved.
So, are you going to sit around there feeling satisfied with your efforts so far, while some hungry and relentless upstarts are spending sleepless nights strategizing on how to capture your market?
An innovative startup has the mindset of continuous product and service cannibalism. If there is a way this product or service can be improved to become faster, better or smaller, then it better be us who come up with the improvements rather than one of our competitors.
And the kind of thinking that is bound to keep you on your toes is asking yourself, what products or services will make us money in the future? What advantages will cloud-based distributed platforms with their global ecosystem have that could be a threat to our business? What will we do when The Big Four – Google, Facebook, Apple or Amazon – comes after our business? You see, no industry is completely free from these four. How they impact your field when they eventually make a detour your way? What aspect of your business should new investments go to ensure that technology does not rip the carpet from under your feet soon?
Give your people permission to try
Innovation thrives when supported actively by management. It is important that your people know that it is okay to try to do something in a new way to come up with faster or better products. Put structures in place to ensure such tinkering do not stand in the way of short-term profitability since the business must survive in the short-term to be able to achieve long-term sustainability. That said; each employee in our team should be aware that they have a level of creative autonomy to think independently and find new ways of solving both existing and future problems. While great leaders are generally good decision-makers, they know that it is counterproductive to hire people and make all decisions for them – so your organization should prioritize listening, mentoring and trusting of your people to do the right thing.
Understand that it is okay to fail
If you are starting an innovation culture in your business, it is important that you keep in mind that most of the ides that you will get from your people are not going to be great. And even for those you thought were good, there is also a good chance that you will fail in the implementation. You see, if you are not failing often, it likely means that you are not innovating enough. Fostering innovation comes with the assurance that most of what you try may not pan out, but the few that do pan out will often make the difference. As successful as Tesla is, every year they abandon tens of millions in research programs for products that turned out to be duds. But you bet that they will never stop innovating! This also means that when they fail in their efforts to innovate, no finger-pointing or blame games are allowed as long as ethics and safety principles are not compromised.
Measure the right metrics
You may often hear people use the expression “You can’t manage what you can’t measure”. While we all know that data is useful for strategic decision making, how do you measure an abstract like an idea, or a culture of ideas for that matter? It may be very difficult to do that, and your success may well depend on how mature your processes have evolved.
Measuring innovation requires a different set of metrics than traditional business metrics that your may have been using. Keep in mind that here you are looking out for indicators of what will be useful to your organization in the long run.
These kinds of metrics will enable you to see if you are recording enough innovative activities, and whether those activities are getting enough results. Some key input metrics to watch out for here include the amount spent on R&D as a percentage of sales, the number of innovation projects started, the number of overall ongoing projects, the number of employees that have been trained in creativity and innovation, and so on.
On the other hand, output metrics that you can monitor in your organization include the number of innovation projects that lead to major product or service outcomes within a given period of time, revenue and earnings attributed to new products, cost savings as an outcome of innovating on processes, and the return on investment of innovation activities.
Eliminate Unnecessary Bureaucracy
The long lag times associated with bureaucracies in especially in large organizations put unneeded speed breakers in the path of innovators, making it frustrating and a major demotivator for innovative practices to thrive. While not relinquishing control completely, it is important that if leaders are serious about embedding a culture of innovation in their businesses, they must consider eliminating bureaucracy as their number one job.
An example that comes to mind immediately is a former colleague of mine who mentioned avoiding potentially rewarding event trips because of the burden of paperwork and frustrating approval process in his current organization. If innovators must thrive, they must remain at the cutting-edge of their industries. Hence, such processes end up as a killer disincentivized innovation in his organization.
Support Cross-Functional Team Collaborations
The final factor I will consider is the need to get units and departments collaborating on projects together. Teams should not be straight-jacketed based on roles; neither should they be put in competition mode where information flow may be hindered across units as a means of maintaining an edge. While the intentions of pithing teams against each other may be seen as a motivator, the prize is paid in innovation.
This even holds true when different organizations collaborate on projects. An example that buttresses this fact is a study that involved 10 mature tech companies who collaborated on a number of projects with each other.[1] The study found a correlation between collaboration levels and innovation levels that was too significant to ignore. The more the collaboration levels recorded, the higher the number of patents that were produced at the end of the project.
The highest collaboration level resulted in 18 new patents and participants rating of 9, while the lowest collaboration levels produced no patents and the participants rating was 2.
Takeaways
· Leaders should encourage failure in their teams as a breeding ground for innovation. If you are not failing often, then you are not trying hard enough.
· Be a cannibal and rip out your best products – then make them better.
· Measure how you are doing, then reinforce what works.
· Collaboration, not competition.
Can you think of any additional ways leaders can create a culture of innovation other than those I’ve mentioned in this article? I’d love to hear your thoughts.
Quick Summary
Prefer the short version? Here is a concise recap of the key ideas in this article.
Like many other businesses out there, you may find innovation to be a valuable trait that should be identified with your business, but your corporate culture may be steeply anti-innovation without your even knowing it. A business that focuses on the short term will likely get short term results, while a business that focuses on both short-term metrics and long-term innovative practices will embed long-term sustainability and ongoing profitability into the business. The role of these experts would be to conduct periodic or even regular trainings on creativity and innovation practice, and steer the innovation strategy of the organization in.
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