We have identified four key capabilities that truly innovative organisations do well.
Strategy: A clearly defined innovation strategy which guides decisions, and an explicit innovation ambition from the Board and Top Management.
People: People are innovative, have a strong capability to innovate, and have innovation tools and innovation metrics.
Process: Deep market and customer insights, constantly uncovering and understanding today’s and tomorrow’s customer needs, collaborate well with partners and leading-edge customers.
Culture: Encouraged to think big, dream big and take calculated strategic risks. Great at making innovation investments, funding is easily available for new innovative projects, and have the time and freedom to innovate.
Innovation as a Strategy
Innovation means different things to different people and is industry and sector context specific. For example, an innovation in the health sector will differ from an innovation that relates to the use of solar technology. In the former, people’s health is at risk if the innovation’s downstream impacts are poorly understood, while in the latter, failure would be an inconvenience, or even seen as a major political issue in the rapidly evolving industry.
Innovation requires individuals who have a mindset which is comfortable dealing with uncertainty and ambiguity. These individuals love to explore, learn, create and test opportunities. They view roadblocks as learning opportunities to reshape or pivot their innovation.
Highly-innovative organisations are encouraging their people to innovation, without implementing disruptive change programs. The practical starting point to improve an organisation’s chances of stimulating and sustaining innovation is amongst the organisation’s people.
The leadership team is ultimately responsible for driving innovation and manage it formally as part of the organisation’s strategy. Holding the leadership team accountable for encouraging innovation makes a big difference through formal innovation targets or metrics. In this way, innovation can be not only be encouraged but can also be managed, tracked and measured as a core element in an organisation’s strategic initiatives.
The four Innovation Phases are:
- Opportunity Identification: Ideation, finding great ideas, concept development;
- Opportunity Development: Market research, strategy development, developing, testing and piloting those ideas into the new product, service, program or business;
- Scaling Up: Launching the innovation, testing and validating that systems and processes are ready to scale;
- Growth: Delivering the innovation at scale, driving growth so that the innovation is sustainable and merges successfully into the organisation.
The cultural part of innovation is key. Innovation results from iterative experimental learning. Innovation requires an empowering work environment. To facilitate increased innovation, one needs to enable and drive innovative behaviours by aligning culture, structure, leadership behaviours, measurements and rewards.
- Create dedicated innovation teams
It is important to remember that there may be employees in your company who have the best ideas but are not good at communicating them. Therefore, it is important to have a team to help support and encourage idea sharing. If your company does not have the resource for a dedicated team this can be made up of members from different areas in your business.
- Introduce an idea sharing platform
You need to bring employees together to share and collaboratively generate ideas, whether in-person or virtually, the right platform is important.
For example, Dell IdeaStorm (www.ideastorm.com) provides a platform for anyone to submit their ideas, and to comment and vote on ideas from other people whereas HP organizes brown bag lunches for their employees to encourage them to discuss their ideas.
- Create a screening process for all the ideas
You need to have an idea screening processes in place so your employees know that their ideas are being considered. This can be done in different ways.
At Electrolux, cross-functional team consisting of design, research and development, and marketing professionals are involved in the screening process which involves ideas being tested with focus groups. Any design failing to achieve a 70% approval rating from the focus group is eliminated automatically. Whereas Google simply collects ideas from employees through emails at a company-wide suggestion box, and make the ideas available for all other employees to rate and comment on.
- Employ innovation advocates
Have a team of advocates on board who support the idea generation and innovation process. This group will inspire change throughout the organization by asking questions, supporting ideas, and demanding radical changes.
For example, at Boeing, a ‘Phantom Works’ group was created which supported the idea generation and innovation process by communicating between departments and sought ideas and technologies that could be applied in newly identified areas of the organization.
- Encourage collaborative experimentation
Organizations should employ collaborative experimentation to improve the chance of success at innovation. Communicating with stakeholders brings new ideas, corrects problems, addresses market needs, and speeds up the innovation process.
An example of this is when Google made prototypes of products such as Gmail and Google Earth available for existing users which helped with developments.
- Communicate with your employees
It is important for your employees to ‘buy in’ to your ideas and know as much as they can about the development of them.
For example, HP Labs uses electronic newsletters, informal coffee talks, and peer reviews to convey its latest innovation developments to employees. Having several venues for sharing information increases the likelihood that every employee will find a useful source for information about innovation and new ideas in the organization. This decreases uncertainty and negativity and helps people to be open to new ideas.
- Be specific with your communication
Beyond communicating to your employees, you need to let them know how the innovation affects them and the positive outcomes it could bring. For example, at PNC Bank, online learning courses for employees were tied to specific job skills so each employee could tailor their online learning to meet their objectives. In this way, employees could see how the innovative course offerings applied directly to their situation and could then decide how to invest their time.