To innovate or not to innovate?
There are many options for leaders who wish to boost their organisation’s ability to innovate: set up a new-growth group; launch an idea contest; change the reward systems; form a venture investment fund; build an open innovation platform; bring in outside speakers; hire seasoned innovators; paint the walls blue; buy a lot of books.
Too frequently, companies decide what they’re going to do before determining why they’re going to do it. That’s challenging, because developing innovations that have a lasting impact requires going beyond doing one single thing. Answer one fundamental question: What problem does innovation need to solve? The answer determines in which part of the organisation a company needs to intervene, what resources leaders need to be ready to commit to, and how long it will take before any impact is felt.
Innovation can create new growth and a leader will recognise that the company needs to push the boundaries of today’s business to achieve its financial objectives. Perhaps competitive intensity has increased, a new disruptive development has emerged, or a company’s core business has begun to slow. Hitting growth and profit objectives requires boosting the ability to create new businesses that wouldn’t naturally result from day-to-day operations.
Competing more effectively in existing markets
The company might still be seeking to spur growth, and be confident it could, if the creativity and ingenuity they see occurring in spurts throughout the organisation could be more systematically harnessed. Perhaps frontline salespeople and customer service representatives could find innovative ways to attract and retain customers, thereby increasing employee engagement and loyalty.
Organisations may wish to tackle both of these problems simultaneously – reaping new growth from existing operations while also pursuing business beyond its current boundaries. Here, efforts should focus on institutionalising innovation by working on underlying systems that govern resource allocation and decision-making. This kind of intervention requires serious senior leader commitment because of the scale and scope of the effort.
Investing in innovation isn’t a cure for all ills. If the core business is in crisis or struggling, a leader should focus on those issues first. The full benefits of investments in innovation are only fully apparent years in the future.
Is your business ready for innovation?
Adapted from an article by Scott Anthony, David Duncan and Pontus MA Siren, Harvard Business Review