What is Innovation?
The Merriam-Webster dictionary defines innovation as “the introduction of something new.” A beautifully simplistic definition, it captures the essence of this complex and immeasurable term. But while the concept is abstract in nature, there are ways to approach it in a more systematic way to reap the benefits, and feel less overwhelmed.
Much like story theory, the plot itself could be about absolutely anything! But underneath the face of limitless options, there is a very well defined framework that acts as a guideline for writers to follow. It helps them craft an engaging story that keeps an audience invested, and the method for its success has been studied and dissected for hundreds of years.
Diving into ‘innovation’ is no different. Whether you use different terminology such as ‘improvement’, ‘ideas’ or ‘new directions’, at the root is change, and methods of change can be studied. In a previous post we outlined the different types of innovation, but today will look at key aspects to focus on within a business - people, structure, culture and strategy - and the process of how you can implement it.
People, people, people. They are what a business is made up of - the fabric, the glue, the asset. You may have heard the term ‘Organizational Capabilities’ before; essentially it is a term used to describe the collective alignment of a team's skills and expertise within a company. What can the people on a team do? What do they believe? What motivates them? While the term competency is used more to describe an individual, capability is what spans across an organisation. An assessment will help not only pinpoint the strengths and weaknesses across a team, but helps management come up with strategies to utilise or deflect them:
Do employees understand what is expected of them? Do they share the same values as what your company stands for? Is everyone focused on the same brand? Does your team show strength in finding new recruits? Are they collaborating with one another? Does your team have a strong relationship with your customer base? Do employees have a space where they can experiment with new ideas?
Let’s talk Ambidextrous Organization. Amb-i-what? This structure is basically the process of applying multiple approaches to a company’s strategy. As we outlined in a previous post, disruptive innovation is an important concept to know, whether it’s for the purpose of pursuit or safeguarding against incoming competition. However, it is important not to get tunnel-vision: if you focus too heavily on a disruptive strategy, you risk destroying your existing model which has proven successful through incremental gains, but if you only focus on the latter, you could risk getting disrupted from the outside.
A smart company will understand that no single approach will be sufficient or permanent for a company in its entirety over the years. For true diversity and dynamism within a company, there must be a balancing act: looking toward the future to explore new opportunities while at the same time paying attention to existing strategies which do not need disruptive change. This is done by creating separate units within the organization, with each one having its own unique set of processes and cultures. The four main approaches to ambidexterity are:
Separation: separate divisions within a company are created and run independently from the other, but are operated from one top-down management team.
Switching: this refers to the process of continually ‘switching’ between the methods so as not to remain static
Self-organization: each unit or team manages itself, and chooses the best route for their specific goals
External ecosystems: when a company outsources people externally with the necessary skills to specialize in a specific area.
Culture is loosely defined as the customs, institutions and achievements of a social group. Getting more specific, innovation culture can be defined by the details of an organization’s values, structures, habits, and practices. For a healthy innovation culture to thrive, there must be a strong sense of collaboration with shared collective values and a shared purpose. Because all cultures have consistent and observable patterns of behaviour, it is something that can - and should - be analyzed or diagnosed for the better.
In an article by Michael D. Watkins on culture and the power of incentives, he notes that because culture is a dynamic and ever shifting entity, it should be managed as a continuous process, therefore the culture of organization should always be developing. Culture is something that can be moulded and materialized through creating the right environment - one invested in fresh perspectives and alignment of purpose. On the organizational level, what is your company doing to curate this? Do you have an idea management system set up which allows for conversation across the whole team? Are you making sure everyone on the team is being heard?
In business, innovation is the philosophy around harnessing new ideas to create value for people and drive economic growth. The innovation strategy is the plan or the blueprint for making this happen, and allows everyone across the team, including investors, to get a transparent look at the activities and key initiatives taking place to make that goal happen.
There is obviously no one way to approach this, as this will depend on the specificities of the project or business, but there are a few good pointers that can help shape the plan. First things first, you must determine the why factor before moving anything forward; what do you want to achieve by doing this? Once you identify your focus, you can establish which innovation system and technique is most suited. It is then time to assess your team's capabilities; what are the assets required to succeed? Who needs to be collaborating across the organization to bring it forth? It is also important to know both your customers and your competitors; can you place where you sit in the current market?
How do we do it?
The objective of innovation is to find the best ideas, and move those forward. The movement of an idea from an embryonic state into realization is the process of innovation. It is a systematic approach that guides the workflow throughout the life-cycle of an idea.
Finding the right process is a process in and of itself. After you’ve dug a little deeper, you will have a good foundation from which to analyze your company’s current environment, and what unique strategies are needed to make your goals happen. Below is a very brief and short introduction to three of the main processes used in managing innovation:
The Phase-Gate Process: While ideas are limitless, resources are not. This philosophy somewhat underpins this process, which creates a series of ‘gates’ the idea must pass through in order to be successful. True to its name, the idea has to go through a series of phases, and cannot progress in its development unless it is ready to enter the next ‘gate’ which acts as a doorway or assessment to the next phase.
The Push vs Pull Process: The Push process refers to a more internally focused model, such as being product or technologically oriented in research and development activities. The Pull process is more externally driven, focusing on market and customer focused models.
The Lean Startup Process: This process contrasts with phase-gate, in that it allows the ideas and the idea makers more free reign, equipping them with the necessary resources to make it happen. The purpose of this is not solely built around trust and freedom for the employee, but rather allows a company to test out a product in the market as fast as possible. It is usually suited for start-ups with limited resources who are responding to a fast-paced and changing environment.