From innovation to Innovation – 10 rules to go beyond the buzz

08 February, 2016 by Daniel Cousins

To innovate; “The action or process of innovating. Creating a new method, product, or idea.” It is certainly the buzzword of the moment in business, governance bodies, and institutions worldwide. But what does it mean in practice, really; beyond just the next incarnation of tired terms like value, intelligence, design, or dare I say, ‘digital’?

Organisations are now trying to turn innovation into Innovation, a special-noun function of their business, as much as say Accounts Payable or Online Sales. This doesn’t feel altogether right. It is what the definition states, but also it implies a new way of thinking and working – a step-change aside from the norm to create something bigger, better, more effective in an order of magnitude separate from what has gone before. Let’s not forget, Innovation, and the surrounding culture and practices, created the wheel from an innocuous boulder, the motorised car, the internet, general relativity, space travel and the nuclear bomb. New, creative and bold ideas to answer big questions or fix big problems.

However, Innovation is not clean, there is no set formula or hidden knack. The Innovation machine cannot just be switched on and immediately start to change an organisation from business as usual to the next ‘unicorn’. Despite that, there are a few common things in successful organisations, that grease the wheels of creating new ideas, products, and methods – and make them more likely to be effective – and it is as much about the soft cultural factors as assistance from set methods and tools.

In this vein, and although by no means a definitive or forensic analysis, I have pulled together my ten key rules for successfully harnessing the modern meaning of Innovation.

Innovation to the core – Innovation needs to be implicit in the overall culture of the organisation. It must become a brand value influencing the approach to all problems, not just the particularly tricky ones.

From the top to the bottom (and back) – It must be driven from the very top in behaviour and actions, and permeate every level of the organisation, making it inclusive all the way to the shop floor and back up again. It is those getting their hands dirty who often understand the drivers of value and wants of the consumers, users and citizens, the best.

Innovation requires enablers: Innovation cannot function in a vacuum, it is not a standalone thing, it is as much a result of many factors acting in harmony:

  • People – Innovation ‘champions’ – banging the drum and driving involvement. Leadership – setting examples and encouraging behaviours. Disruptors – speaking out, finding faults and shouting ideas!
  • Reward/Incentives – Encouraging innovative practices and effort towards being innovative.
  • Tools – Providing systems, materials, and resources to innovate effectively; e.g. Collaboration spaces, eTools, Feedback platforms, etc.
  • Processes – Guides to help people innovate and use the resources and inputs available; Design thinking, iterating ideas, continuous feedback loops and assessment, etc.
  • Data – Relying on facts not assumptions to measure the success of an idea from the investment made.

The risk balance – Innovation cannot always run free and inevitably must balance against risk (be that financial, reputational, brand, etc.) A new approach to risk appetite must be embedded across all teams and drive different allowances and decisions (for example, releasing funds to be sunk with little expectation of serious return.)

Long versus Short-termism – Long-termism must replace short-termism – a good idea may just be a good idea for a long time, before a way to monetisation or other leverage can be found. This shouldn’t necessarily be a reason to fear it; many amazing ideas would never have been innovated if only a short term gain was the driver!

Success factors reimagined – Linked to the previous point, the classic view of good EBITDA, NPV or Free Cashflow may need to be replaced with alternative metrics focussed on customers or other measures of success (for example, customer engagement, net number of users, social sentiment, etc.).

Frenemies welcome – Partnerships are not just welcome but in many cases encouraged; frenemies are more common than not. Ecosystems need to be built and understood, where innovation in one area helps and enables innovation in another. Innovation is hard. These networks and co-symbiotic relationships are critical to lessen the load and de-risk big ventures.

Innovative innovation – The approach to innovation, must in itself be innovative. Standard processes and old ways of working cannot be simply rehashed for the new purpose of ‘innovation management’. New approaches must be explored in support of ideation, development, and iteration.

Prepare to pivot – Ideas can never be too precious. One of the key aspects of successful Innovation is ‘Pivoting’ – changing course, rather than scrapping and going back to square one, as the context of an idea evolves or as new functionality is uncovered. Often the original idea isn’t what ends up being the best idea – not being precious and understanding the emerging opportunity and being quick to respond, changing tack in the development of an idea, business practice or goal is critical to Innovation success.

Find your problem – As illustrated above, Innovation should not be overly constrained; however, a laser focus, in the moment, on the problem or need requiring innovation helps drive any cultural, process, or systematic efforts. Organisations must free resources to pursue innovation but innovation cannot exist just for itself, as budgets and positive emotion will expire long before the ideas.

These principles are at play in some of the highest profile organisations, known for Innovation – Facebook, Tesla, Uber, to name just a few. They effectively understand their customers, their resources, and their goals; and invest time in innovating and embedding Innovation into how they develop their strategy, products, and operations. They never rest on their laurels and continue to adapt and pivot to the context as it evolves around them. Through this they are setting the agenda in their fields, what they do affects their customers and users but also has the power to impact the whole ecosystem around them – competitors, suppliers, partners, and society. Their approach to Innovation means they often make the big, new ideas, break new ground, and ultimately change the world. Of course, not all organisations have their vast scope or leverage, but by understanding what Innovation is, and as much what it isn’t, all organisations can make a step-change in what they do.