No Organization Can Thrive Without Innovation
Why is there a Need for Innovation?
“Innovation isn’t optional. It’s imperative. Customers demand it. Competitors will outflank you if you don’t achieve it. Talented employees won’t join your firm if you don’t deliver it. Analysts expect it. Investors reward it” (Keely & Walters, 2013).
In order to thrive, or even survive, companies have no choice but to constantly innovate and find new ways of doing business.
“Business, because of its purpose, has just two functions, and only two: marketing and innovation. Marketing and innovation make money. Everything else is a cost.” Peter F. Drucker
Think about it, in today’s global economy, anybody, anywhere, at anytime, may be able to offer the same service as yours, perhaps cheaper, and/or of higher quality or come up with a new product that responds better to new market needs. Without innovation it’s easy to lose your competitive advantage and for some companies this has happened very rapidly with disastrous results.
And it is not just businesses which need to invest in innovation. All organizations, be they in the public or private sector, governments, hospitals, universities, foundations…have to mobilize energies to that end.
What are the Sources of Innovation?
Opportunities are everywhere! External sources include changes in markets, demographics, economic developments and wealth distribution, technological advances, scientific discoveries and many more.
Internal opportunities range from new business models, operational and process revisions, cost reductions, faster production, increasing margins, new products and services, including refinements, accessories and off-shoots to improvements in working conditions, management practices and more efficient hiring and training procedures. The list is endless.
Who Should be Involved in Innovation?
Everyone, from the CEO down to all employees, must devote time to search for new ways of doing business more efficiently and with better results.
“Innovation is a team sport. In fact, an organization that depends on individual innovators alone is destined to fail” (Keely & Walters).
Besides, employees have an obvious stake in the success of their company. Being solicited and participating in innovations, they also feel more engaged and responsible.
“When you give everyone a voice and give people power, the system usually ends up in a really good place.” Mark Zuckerberg
When Should You Innovate?
Permanently! There never has been or will be a period when innovations can be put on hold. Rapid changes in all walks of life require constant adaptation and renewal.
“If the rate of change on the outside exceeds the rate of change on the inside, the end is near.” Jack Welch
What Innovation Strategies and Methods?
To win a competitive advantage, many starting points and approaches can be found to initiate and drive innovation, including incremental or disruptive strategies (cf. Christensen & Raynor, 2003; Harvard Business Review, 2013; Eich, 2014; Keely & Walters, 2013).
Concerning external sources, market and customer surveys, benchmarking, continuous monitoring of competitors, as well as technological and scientific watch, are essential to preventing back sliding and falling behind.
With respect to internal indicators, “management by questions” can be a useful practical technique. For example, asking yourself and your team periodically: What made you lose or gain time today? How could you have collaborated better as a group? Which tool or infrastructure was deficient? What working conditions need to be improved to reduce stress and provide more satisfaction and pleasure at work? How did the work climate contribute to or hinder performance? Which management practices need to be changed to reach optimal results? and so on. For more questions see (1).
Many techniques have been developed for creative problem solving and to enhance out-of-the box, divergent or lateral thinking (2; 3). Brainstorming (4), for example, has been used successfully for decades in a broad range of applications to generate new ideas in the search for new products, services and practical improvements. In order for this technique to reap maximum returns, it is all important, however, that it be properly planned, carried out methodically, and that critical rules be strictly followed (Berkun, 2010).
Misconceptions and Myths about Innovation
–A common bias is that innovation means creating new products, services or technology. And yet, improvements in organizational structures, processes and practices can result in major and enduring benefits.
–There is a wide-spread misconception that innovation is the exclusive domain of management, R&D or marketing. But isn’t each worker, confronted with constant challenges, and closer to the daily operations, interactions, customer care, etc., in an excellent position to contribute to improvements and even to reinvent his or her job?
–You often hear people say “I am not creative” or “I have no imagination”. But contrary to common belief, experience shows that, given the right approach, everybody is capable of imagination and has the potential of coming up with promising ideas.The lone inventor is a myth (Berkun, 2010). To be successful, innovations require collaboration, moving together in the same direction.
–Everybody loves new ideas. Right? Not really. Resistance to change is universal. Most of us don’t like to step out of our comfort zone and be forced to adapt and evolve, especially when our present behavior gives us satisfaction and seems adequate.
–And think of the legendary epiphanies which were supposedly at the origin of major discoveries (Berkun, 2010), like Newton’s apple, Archimedes eureka experience in the bathtub or Darwin’s insights during his voyage on the Beagle. The fact is, major breakthroughs are the fruit of hard and intensive labor rather than the result of a sudden flash.
Obstacles and Barriers to Innovation
–The lack of a clearly articulated innovation strategy and understanding market needs are major obstacles to progress and achieve results (5). The absence of a bottom-up strategy “focused on people as the key source of competitive advantage” hinder innovation. “One needs to capture all those insights from managers to employees. Unfortunately, many companies fail to unleash their most valuable resources: human creativity, imagination, and original thinking” (6).
–Insufficient time explicitly devoted to innovation efforts is another cause for failure. Accountability, reflected for example, in performance reviews, would constitute a major reinforcement to invest more energy in this priority for all organizations.
–Giving up too soon and abandoning after a failure have also been shown to impede innovations. A strong commitment and perseverance are necessary to achieve results.
“I have not failed. I’ve just found 10’000 ways that won’t work” Thomas A. Edison
–Other obstacles to innovation include the absence of a shared vision, short-term thinking, lack of ownership by senior leaders and focus on successes of the past rather than on the challenges of the future (6).
Key Success Factors in Innovation
Research and best practices have revealed a number of critical dimensions which are necessary for innovations to succeed:
–Innovation must be accepted as a never-ending, perpetual process just like change! This implies being proactive, working constantly on improvements and searching for new approaches, even when successful products or services continue to yield important benefits.
–Productivity and creativity are stifled when people are stressed. Well-being, pleasure, meaning and purpose at work, on the other hand, enhance performance and innovation.
—Taking risks is inevitable for successful innovation.
—An inspiring and visionary leader is just as indispensable for successful and continuous innovation as implicating all workers in the ongoing renewal process. In a recent study, 1500 CEO’s ranked creativity as the most important leadership quality (6).
–An organizational culture, as exemplified by Google, Apple, LinkedIn and others, which favors openness, the permanent and systematic search for new ideas and flexibility in all sectors, is conducive to innovation.
–Employees and teams having contributed to innovations must be recognizedfor their engagement. Rewards and collective celebrations of successes are the fuel for continuous involvement and commitment.
The marked presence of worker autonomy and empowerment characterize the most innovative companies. A case in point is Google’s allowing its employees to spend 20% of their time on their own projects, a practice which has contributed significantly to the company’s benefits.
In today’s global economy, the competition is ever present. In order to survive and flourish, all organizations, be they in the public or private sector, have no choice but to constantly innovate.
The good news is that both evolving market needs and internal organizational changes present numerous opportunities for break-through innovations or incremental improvements. Innovations need not be limited to new products, services or technologies.
Research points to a visionary and inspirational leadership in combination with an all-inclusive participation by management and employees as key ingredients for successful innovations.
Overcoming resistance to change, as well as misconceptions, such as the epiphany myths or the fallacy that creativity is limited to certain functions or people are necessary to keep moving forward.
A favorable work climate emphasizing empowerment, autonomy, personal initiatives, and pleasure at work, as well as recognition and rewards for individual and team contributions, strengthen the commitment to this vital priority for businesses and public institutions.
Berkun S. (2010), The Myths of Innovation, O’Reilly Media, Sebastapol, CA.
Christensen C.M., Raynor M.E. (2013), The Innovator’s Solution: Creating and Sustaining Successful Growth, Harvard Business Review Press, Boston.
Eich D.J. (2014), Innovation Step-by-Step: How to Create and Develop Ideas for your Challenge, CreateSpace Independent Publishing Platform.
Harvard Business Review (2013), HBR’s Must Reads on Innovation (with featured article “The Discipline of Innovation”, by Peter F. Drucker), Harvard Business Review Press, Boston.
Keely L., Walters H., Pikkel R., Quinn B. (2013), Ten Types of Innovation: The Discipline of Building Breakthroughs, Wiley, NY.
Marcel Lucien Goldschmid, PhD, Director of MTC