Amazon, Google, Microsoft, Netflix, Facebook, Intuit and Capital One. Just a few examples of high-profile market leaders that publicly attribute their ongoing innovation successes to their commitment to digital experimentation. These firms can expect their creatives to experiment freely and regularly.
A few years ago, Google said that it ran between 3,000 and 5,000 experiments annually. And as a user of Google, any time you use the search engine, you are one of these experiments.
In a company structure such as Google, when someone has an idea, they don’t require approval from higher up to chase it – they let the data provided from the results of their experiments do the talking. Google understands that an innovator wants to see his/her idea all the way through to completion.
Incremental innovation over radical innovation
There is a growing trend across businesses towards rapid, low-risk innovations. Take our work with Waitrose as an example – Waitrose illustrates that not all innovation is about consistently making huge radical steps forward; but more about ‘everyday’ contribution from across the business. Take Waitrose as the example here – opening up suggestions for store improvement across all partners and stores. Just one idea that was submitted to the Partner Ideas Scheme by an employee (reducing paper waste by re-formatting till receipts) continues to save the business £100,000 annually. Waitrose has the understanding that everyone in the business has the power to generate powerful ideas.
Democratising innovation across the business also helps bring out more powerful innovation from the so-called ‘middle-ground’ i.e. not tiny incremental innovations and not radical leaps forward; but activity that sits between the two on the innovation scale. This is known as differentiated innovation; it usually focuses on a mix of efficiency increase/process improvement combined with user experience/proposition development. Its low-risk, not no-risk, but the benefits and gains can be disproportionally big.
Innovation agility enables reduced times to market
One of the biggest challenges that organisations face today is their relevance to the end user, and over the last few years, we’ve seen many organisations fall as a result of their lack of manoeuvrability and innovation capability (combined with the pressures of recession). The result of this is that even organisations that have survived still take too long to get new ideas to market (68% of UK corporates take just as long to get new solutions to market as they did five years – Accenture).
So, opening up innovation in terms of ideation and validation reduces time required to incubate and refine ideas and solutions, then when using minimum viable product and prototyping techniques, you reduce the wastage time in terms of ideas that aren’t fit for purpose. This, in turn, helps speed up the development of useful ideas and thus, time to market. Helping keep you more relevant – as the ideas you get to market are still useful to the end user as they are aligned and timely.
Role of culture in innovation
Adopting more agile working practices and allowing for more decentralised innovation, engenders innovation more holistically across the organisation – and this can have significant benefits. In a survey by Ernst and Young of 100 board members from FTSE 350 companies, 86% said that culture was fundamental to their company’s overall performance and strategy, and 92% said that investing in culture improved their financial performance.
Understanding that you need a more innovative business culture is a great first step, but you need more than just good intentions. Becoming more innovative requires success across all 5 pillars of everyday innovation – Strategy, Leadership, Management, Culture and Process & Tools. These pillars are the key components required for building a coherent and strategic roadmap for building a culture of innovation and becoming an ‘everyday innovator’.
- Strategy is required so the organisation knows how, why and where innovation is required and how it aligns to the overall company strategy. Innovation is a strategic driver of growth, differentiation and competitive advantage, therefore it needs to be looked at strategically.
- Leadership and Management are both required because leading and managing for innovation is different than leading a non-innovation focused business. New skills, behaviours and values are required.
- Culture is just one part of the overall picture, but this is focused on the end user. Whether it be an employee or a customer, the user has to feel that their input is welcomed and valued, and this will encourage them to be a part of the conversation whenever challenges arise.
- Process & Tools are key in terms of democratising innovation across the business – tapping into hugely valuable and creative crowds, driving efficiency and innovation contribution. Having the right tool is crucial to bringing all the pillars together, creating a focal point for innovation and collaboration; and having the right process in place can ensure that those innovative ideas that are generated can be evaluated, researched and implemented quickly and efficiently, creating a more agile innovative organisation.
Reviewing strengths and weaknesses across the business
Building a culture of innovation isn’t as simple as just launching an innovation initiative. There are a number of key components that go into doing so across all five pillars of everyday innovation. The best way to understanding how you can improve innovation within your organisation is to understand your strengths and weaknesses. Understanding your current innovation maturity across the organisation on key areas such as Strategy, Leadership, Management, Culture and Process & Tools can provide valuable insight into where the business needs to focus. Use the findings to strengthen weaker areas and work towards becoming an everyday innovator.