As their core business continues, established companies must innovate for the future. Today, most corporate leaders accept this reality. Senior executives consider innovation to be one of the top three drivers of growth in their companies.
For established companies, innovation is no longer only a nice thing to have. It is crucial to their survival. In part due to the better funding and the incentives startups enjoy today. On the other hand, this is not always the case for innovation in large corporations.
Leadership teams are often eager to innovate, but they often fall victim to myths about innovation. As a result, they become involved in a wide range of different activities since they don’t understand how innovation systems work. Innovation labs and corporate accelerators are some of the more expensive programs that companies have tried – they’ve also tried idea competitions, rapid prototyping, and other “hackathons”.
While most corporations are investing in innovation, most executives still have dissatisfaction with the results. A little over 30% of leaders are confident in their innovation decisions. Even in the rare case of success, innovation is often more of a one-time project than a formal, repeatable process.
Innovation works best when companies take time to assess their readiness to cultivate innovation. Putting in place the right internal structures and processes are essential in order for innovation to shift from a one-time event to a repeatable process. Innovation readiness is crucial to long-term sustainability.
What do you need to put in place to get your Innovation Journey off the ground?
Innovation programs are often doomed to failure without explicit support from leadership. In order to create and sustain innovation as a repeatable process, your CEO should devote a significant portion of their time to actively leading innovation. A leader’s role goes beyond encouraging innovation with words, but also demonstrates these attributes:
Innovation strategies should be outlined by leaders so their teams understand where they should focus their efforts. There shouldn’t be ambiguity in the strategic guidance, or only a small number of people know what it is. In order for innovation projects to achieve success, leaders must provide clear guide rails.
Often, there are no designated resources for innovation within companies. Instead, they must hustle and scrape to gather resources that can be withdrawn from them at any moment. Leaders need to make sure that they are allocating budget, time and resources that are protected from encroachment by the core business.
When a company’s leadership is exclusively concerned with running and improving its core business, innovation cannot flourish. Leadership must take an active role in making investments to explore future growth opportunities. These investments in innovation need to scale properly so that you can show progress and success.
We must also create company structures that foster innovation in addition to leadership. A culture of innovation is often referred to by leaders as practices such as ideation, experimentation and iterative development. This type of behaviour does not just pop up out of nowhere. For innovation to flourish, organisations must create enablers and remove blockers. We will ultimately reward and celebrate our company culture based on:
The Influence Of Legitimacy
What does your organizational chart say about innovation? What career paths do you offer in innovation at your company? Or does innovation spell career doom? Innovative teams will lack legitimacy if they must constantly assert their existence in your organization. Innovation is more sustainable if it is a fundamental component of our institutional structures.
Collaborating with The Core
The core business and innovation teams often have a hard time collaborating. Resources can be competed for, and the core business inevitably prevails. Our innovation teams need clear policies that support their collaboration with the core business. It is especially useful when it is time to scale up new innovations.
Incentive Programs and Rewards
Innovation is usually managed using the same rewards and incentives system as the core business. There are annual bonus targets and a review process that make it hard to recognize failure. Dedicated incentives for innovation need to be different from those for the core business.
Create a practice with the right tools and processes. The same processes and tools that we use within our core businesses cannot be used for innovation. Innovators need to use an iterative process to design and test their ideas:
To design business models and test assumptions, companies must adopt the right tools. Adopting design thinking tools will help facilitate the innovation process. You need a toolbox that works well for your innovation. These tools need company-wide adoption, rather than adoption in small pockets of the company.
Many companies require innovators to write long business plans with five-year financial projections in order to release funding and resources. Innovation does not work well with this decision-making process. In order to reduce risks and test innovations rapidly, innovation teams need to adopt iterative methods. To be consistent with industry best practices, we should optimize our processes for identifying and managing risk so that we can systematically monitor and measure the level of risk in our new ideas.
Our teams can develop and train innovation skills. Our programs must also provide for people with the opportunity to work on and run innovation projects beyond training alone. We should provide such skills training across the whole organisation.
For contemporary companies, innovation is the primary driver of future growth. Leadership must first ensure that their companies are ready to support innovation before embarking on an array of innovation projects. If they do not get their companies’ innovation ready, they risk failure and frustrating their innovators.
How can we help?
Talk to us about how we can help your organisation to review your Innovation Readiness. Making it real is what we do.
How can you connect with us?
We’d love to hear about your innovation journey. Did reflecting on innovation readiness help?
About the Author
Jason Novobranec is Implementary’s Chief Operating Officer.
With over 20 years of Consulting, Program Management & Senior Leadership experience, Jason has delivered initiatives for large multi-national / multi-regional organisations as well as SME’s and is an expert in shaping solutions to fit a customer’s project needs.