The 8 Attributes of Successful Innovation
There is no denying the fact that companies are usually better executors than innovators. Companies tend to succeed more due to improvement in efficiency and optimizing existing business rather than through inventive, “blue ocean” thinking. Yet, any survey ever conducted on what businesses need to succeed will point to the need for innovation.
Also, large organizations such as Google, Apple, NASA actually innovate on a regular basis to stay on the cutting edge of their fields. What is more interesting is that companies do not have one formula for innovation. Apple innovates by focusing on the design and functionality of its products, while google does so by buying out firms that add to their suite of products. In the light of this, what makes innovation possible in some companies more than the others?
Mckinsey conducted a survey to determine the essentials of innovation in successful organizations and determined that there are 8 structural attributes that make the difference.
These are non sequential elements that structure, organize and encourage innovation.
Though far reaching visions can act as call to actions in many cases, in corporate setting they tend to be insufficient. This is because anything that is not measured in growth and revenue terms for businesses tends to be viewed as platitudes. What does work, according to the survey, is quantified ‘innovation target for growth’.
Devising an aspirational vision and strategic plan linked to financial targets, and linking all innovation initiatives to these targets, can go a long way in cascading the need for innovation to team members.
Though good and creative ideas are unbelievably important to a business, usually, the lack of these ideas is never a concern for businesses. It is the inability to the choose the right kind of ideas that businesses have to struggle with. And since innovation can emerge from any aspect of business, searching everywhere tends to be fruitless exercise.
Hence, in the interest of being focused, establishing some ground rules and boundaries tends to be a good measure. Once these rules for the innovation initiatives are established, tracking them against value, timing and risk is also key.
Great ideas are generated from great insight. This points to the fact that insights trump ideas. Looking for insights means looking at three areas – a problem that needs solving, a solution that is different from the rest and business model that generates revenue. Great innovation usually occurs at the intersection of these three areas.
Companies that are able to successfully collect data and analyze it to create a meaningful solution are at an advantage to the rest.
A very essential element of innovation is to be able to evolve the business model itself. This includes elements like diversify revenue streams, modify the delivery models, innovate on the value chain etc. Focusing on newer products or services is far easier as the core of the business is not impacted, but altering the core itself becomes challenging.
The only effective way of doing this is upping the market intelligence game, to separate the signals from the noise. Reevaluating positions, customer segments, delivery mechanism etc.
A lot of innovation has been done by the rebels of a business. Over governed and overtly stiff organizations find it very hard to innovate. It is important however, to be able to maintain a balance. Which means hiring the right team, arming them with the right information and providing them with enough executive power is essential.
To end up with successful innovation breaking down the barriers between a great idea and the market is required.
Defining the scale and magnitude under which each idea or initiative functions is key to successful innovation. Resources and competences must be positioned to make sure a new product or service can be delivered quickly at the desired volume and quality.
Manufacturing facilities, suppliers, and others must be prepared to execute a rapid and complete rollout.
This is an interesting secret that companies tend to keep - Innovation requires external collaborators. Talent and competency transcends companies and geographies. Access to that skill and talent differentiates the innovators from the others.
Smart alliances can include, sharing of ideas, cost sharing, consulting etc. Building an ecosystem that will shorten the time to market and create a holistic list of benefits for market is a very important facet of innovation.
Recognizing and rewarding innovation and innovative behavior needs to be part of the companies’ DNA. Cultures that promote collaboration, learning and experimentation perform better on the innovation scale.
Of course, it is worth noting that nothing guarantees success, but focusing on these essentials increase the probability of success and the ability to repeat it.
At Falak, we are working on creating an innovation wave in Bahrain. Stay tuned for more details on this innovation project coming soon.