From excitement, to impatience
There has never been so much conversation about innovation. It is taking place at industry conferences, in business books, and at training sessions and meet-ups every day in every major city.
The topics span a number of approaches, from different approaches to innovation (such as customer-centric, lean, agile, and design) to the work of actually building and launching new products, to unlocking the power of technology to disrupt your business. Above all, the conversation seems to centre on how to innovate and what ‘counts’ as innovation. And yet the question of why is surprisingly uncommon. Companies of all sizes have latched onto the idea that innovation matters, but many of them struggle to say why it is important.
This can create problems for a business, especially when one person’s vision for innovation is not shared across the organisation.
I have worked in innovation at brand consultancies with innovation teams, at specialist innovation consultancies, as well as in the innovation group of a major telecommunications company. I have heard all kinds of answers to the question ‘why should your company innovate?’ What always strikes me, though, is that few people seem to have really considered why innovation is important in the first place.
Why innovation matters
Innovation is essentially how a company evolves to address opportunities in the future. That could mean improving existing products; or developing new revenue streams and broadening the organisation’s portfolio; or perhaps developing those “moonshot” business ideas that will either disrupt the market or deliver an entirely new business.
Unlike other necessary corporate practices, the impact of innovation is astonishingly broad and sometimes difficult to predict.
Innovation requires constant honing in order to adapt to changes in the market. It’s the thing companies need to invest in when business is strong, in order to use the momentum of today for the future, and it’s what companies need most when things are going badly. Doubling down on the core business is rarely a good idea when most businesses have increasingly low barriers to entry. Seeking growth is perhaps the only way to stay alive.
The impact of innovation goes far beyond developing and implementing new products. Investing in innovation can transform the way a company operates by placing the customer and new technology at the core of the business.
Innovation done properly will refine an organisation’s corporate strategy and make it ready for the future. It can help guide how a business evaluates external investments by defining what the business will need in years to come, and it can even help retain promising talent. Analysts like to see that a company has a robust plan for the future. And innovation can improve the corporate brand, both internally toward its employees and externally to the market.
Why it matters that everyone has the same understanding of why
Most executives I have spoken to understand that innovation is a complex beast and give their companies’ innovation teams a broad scope, and a blank canvas. And yet the freedom of having a budget and very few clear expectations can paradoxically give corporate innovators a problem.
Without a clear why that is shared across the business, it is nearly impossible to measure success or show progress. The initial excitement about an investment in innovation can turn into impatience. Employees and executives alike keep waiting for a miraculous “killer app” to arrive. Business’ impatience with innovation can frequently lead to changes in management that wreak havoc on the best-performing teams. After a frustrating wait, the whole investment is often called into question. This is particularly acute when external factors (often a drop in stock price) can make an investment in the company’s future appear as a nice-to-have for the company’s present.
While it is hard to set a realistic and achievable target for a company’s Return On Innovation without resorting to vanity metrics or setting small and narrow targets that miss the mark, it is absolutely possible for the why to be set in stone. A clear why enables innovation teams to be productive and track their progress in addressing that why. They are able to work across departments, and everyone can have a shared understanding what and how priorities are established. When I have seen this come together, collaboration thrives and the business adapts and innovates.
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