7 ways your company is getting innovation wrong
Though it has always been important, innovation is very much en vogue at the moment. Following the rise of legions of ‘disruptive’ new start-ups and big technological leaps forward in the past few years, it seems like every business leader is talking about how to keep their business responsive to change and their hunt for the next big thing. But many are not matching their words with actions, as new research by PA Consulting demonstrates.
For its Innovation Matters report, PA interviewed more than 800 senior executives from around the world about innovation in their organisations. While two thirds agreed their company ‘will not survive without innovation’, just 24% said they are confident they have defined the skills and activities they need to be innovative. Half said they lack faith in their leaders’ ability to deliver innovation.
The picture has barely improved since PA first did the survey last year, says its chief innovation officer Frazer Bennett. ‘Our capacity as a nation to innovate, to do new things with new stuff, is right at the top of the agenda, and yet we still don’t get it,’ he tells MT.
Here are a few things a lot of businesses are getting wrong:
1. ASSUMING IT’S ALL ABOUT TECH
It’s true that we’ve seen remarkable technological innovation of late – from advances in AI to the burgeoning Internet of Things. But you don’t have to be a snazzy tech company to be innovative. Coming up with a new and better way to structure your workforce or attract talented workers is innovative too, and can just as dramatic an impact on your bottom line. ‘It’s not just about coming up with a new whizzy app,’ says Bennett.
2. LEAVING INNOVATION IN A SILO
‘You don’t solve the challenges of innovation by creating an innovation department,’ says Bennett. Hiring a room full of tech nerds might help you come up with some interesting ideas but it won’t do much to change the way your business functions. To be truly innovative the whole culture of your business and the way it solves problems needs to encourage experimentation and change.
3. FOCUSING SOLELY ON DISRUPTIVE INNOVATION
The sense of urgency that surrounds innovation of late reflects a fear among big business leaders that a ‘disruptive’ young upstart like Uber or Airbnb is coming along to fundamentally transform their market. ‘Someone is going to eat your lunch, there’s no doubt about it,’ says Bennett. ‘We don't know when and we don't know who. But you can sure as hell bet they will. The most powerful thing to do is to eat your lunch before they do.’
It’s important to anticipate what that means for your market in the long run, and how your business will look in five or ten years’ time. But there’s value in day-to-day ‘incremental’ innovation too – finding new ways to improve your business right now. A plan to adapt your business to the augmented reality, blockchain-powered, artificially intelligent future of 10 years from now is great, but you won’t get there if you can’t make money in the meantime.
4. LEAVING IT TO THE USUAL SUSPECTS
Don’t be afraid to mix up teams and get the perspective of people who you wouldn’t normally ask. Your financial controller might be able to spot a problem in your social media plan that wasn’t spotted because of groupthink in your marketing department. Getting people with diverse experiences together to talk through an issue can yield surprising results. ‘When did you last actually go out of your way to inject diversity into a part of your organisation to inspire innovation?,’ asks Bennett.
5. BEING TOO SHY OF COPYING
We were always taught at school that copying is bad, but nowadays it’s positively encouraged, says Bennett. Companies should practise what he calls ‘translational innovation – stealing ideas from one sector and applying them in another.’ Of course patents and other intellectual property rules prevent you from ripping off another company’s designs or brand, but there’s no legal IP in a basic idea.
‘The magic is in identifying the similarities in the problem and then being able to translate it,’ says Bennett. ‘At PA we took innovations out of a cell phone and applied them in advanced drug delivery technologies. We’ve taken innovations from healthcare and life sciences and applied them in the security sector’ (more on the Willy Wonka world of PA Consulting here).
6. FOCUSING ON SHORT TERM P+L
Bennett suggests one of the reasons companies seem to be dragging their feet on innovation is that they’re bogged down in the short term day-to-day pressures of hitting their financial targets. When you’re afraid of not selling enough widgets this quarter then the temptation will be to focus on hitting the phones rather than stepping back and thinking about how to approach things differently.
The answer isn’t to ignore those instincts and throw a load of cash and effort behind innovation, regardless of the consequences. It’s to find a way of quantifying your innovation efforts that feeds into how you measure the success of the company. Some people think ‘innovation is about wasting money on risk, that somehow the strongest innovators don’t care about profit and value creation, but it’s absolutely not true,’ says Bennett. ‘The single biggest barometer for success will be whatever metrics your organisation has set out to achieve.’
7. BEING AFRAID OF FAILURE
This is an old chestnut, but remains nonetheless true. Compared to our counterparts across the Atlantic, Brits are often said to be unduly fearful of failure - preventing us from taking the necessary risks to innovate and grow businesses. ‘Innovation requires an openness to experimentation. We say: start small, fail fast, scale fast,’ says Bennett.
The fact is that some things are going to fail, and there’s not always a way of knowing if your idea will be one of those failures unless you give it a go. You need to reward those who take risks, not just those who are successful.
This post was taken from: http://www.managementtoday.co.uk