Everyone seems to agree innovation is important. Consider the following:
• Studies show innovation increases profit and return for investors.
• Being innovative can help you make better business decisions.
• Focused innovation can also increase productivity and reduce employee turnover.
• Searching for ‘innovation’ on Amazon within business books returns 5,757 entries.
Even allowing for duplicates, this indicates a lot of interest in the subject!
So why aren’t more companies innovating more often? Can innovation really work inside a corporate structure?
Are you Darkminding?
“Darkminding” is a term I use to explain two of the natural ways in which we think:
• Sticking to what is known – we don’t like things to change, so even if we could be more creative we resist developing new ideas because they create risk. We “mind the dark” by maintaining it and trying not to let any light in (i.e. new ideas). This is another way of saying we like the status quo.
• Avoiding trying to develop new ideas – it’s just too much hard work! Why think new things when the old way still works? We keep our minds dark and avoid the effort of creating light.
Darkminding can be quite useful for some things. If you had to reconsider every step in every process you carry out, you’d never get anything done. Routine can be efficient and helps us achieve things we do on a regular basis.
But, unfortunately, the world changes and often the process we’ve developed doesn’t. These changes happen very gradually, though, so it is hard to notice when the normal routine becomes less useful. If things start going wrong, a few tweaks to what we are doing and we may be back where we were. But if the fundamentals have changed, these minor differences suddenly become very big problems.
All this is exacerbated by a corporate structure which often awards, in subtle and more obvious ways, keeping to how things are done and protecting your own area of the business. Change in a company often means a threat to status and control, which makes coming up with ideas dangerous.
How a Company Can Create a Solution
If our brains naturally work that way you may be asking “Can innovation fit inside my company?” Fortunately, our brains also work in more creative ways which you can encourage, based on easing up our initial reaction to ‘Darkmind’ at the first glimmer of a new idea. It may be hard work, but realising our limitations and implementing some of the changes below can create an atmosphere of innovation in any company.
1. Why should I care?
The first step is understanding why innovation is important. There are a number of ways to achieve this, but the most important ones are those which give insight into your specific company. You can produce multiple studies and statistics showing the value of innovation, but without relating it to your company it will not have the same impact.
What are your competitors doing? You need to understand how they innovate, and whether you are up to their standard. Comparison to others outside your industry may also give you a benchmark to aim for. Analysis like this will give you details about where you are falling behind and prey to more creative competitors.
You also need to know how big the gap is between where you want to be in, say, three years and what it will take you to get there. If you want to increase turnover by 20% in that time, and assuming some of your products and offerings will become outdated or obsolete, how are you going to make up the difference? If revenues from new products need to provide part of that turnover, how many new innovations are required? If your analysis indicates two to three new products will be needed, it can often mean you need to have a minimum pipeline of 6 or more viable ideas. The gap may be bigger than you think, but you won’t know until you check.
2. Make ‘Business as Usual’ unusual
Let me deliberately be provocative for a moment. People need the motivation to put forward ideas and accept a culture of innovation. One radical but effective way to do this, suggested by Peter Drucker in his book Innovation and Entrepreneurship, is to review every single area of your business at least every three years and make it clear they will be on trial for their life. Underperforming areas should be rigorously reviewed and cut if necessary. This approach focuses minds on new developments and ideas and keeps people from stagnating and going with the flow. If you know you’ll need to explain how you’ll be profitable in future, you’ll need to be able to explain the gap and how you’ll close it. Innovation is the best way to make your case. If this sounds scary, the pressure the market will eventually put on an underperforming area is usually worse. Globalisation only amplifies this pressure.
3. Make it a part of the system
Whatever systems you have in place, make innovation part of what is done every day. If you review monthly budgets versus actuals, add a section on the status of current product development. If you have regular staff meetings, add a five minute slot to let people discuss recent innovations they’ve developed. Make innovation seem important and soon it becomes part of the culture. Don’t forget you should also take time to step back from your usual work and actually go through some techniques to generate new ideas that can lead to new products, market approaches or cost savings. Just put some time in your diary! Remember, if you make it a habit, it gets easier to keep doing it.
You also need a system to track innovations being developed, including who is doing the most work in this area. You can then ensure you have a fresh and growing list of new ideas waiting to be developed. You can also award people who are continuously innovating. Someone should be responsible to the CEO for this list and for growing the number of ideas produced. Without a system, you’ll have no oversight of where innovation is needed nor will you know how to use the full skills of your most innovative employees.
4. Create connections
Creativity is connection, so the highest priority is to foster people’s ability to do new things and meet new people. Innovation is killed by people working in silos, passing the product from one area to the next. Your company can’t survive with the following mentality any longer:
• “Here you go engineering. We’ve designed it, now you build it.”
• “Here you go marketing. We’ve built it, now you let people know about it.”
• “Here you go sales department. We’ve advertised it, now you sell it.”
Everyone needs to work together, at inception, on ideas or services to make sure they will perfectly fit what the customer needs. The side benefit is that the more a diverse team works together, the greater number of unexpected innovations will arise. Try mixing people up and see what happens.
Another way to get people thinking differently is to move them around. Make secondments easy, for both internal and external moves. And when they’re off, make people aware that part of their time should be spent thinking about how their experience can enhance what the company does in other areas.
The need for leadership
Some of the above ideas you could implement easily, in fact they can be done without people realising you are fostering innovation. Underlying it all, however, is our human inclination to prefer how things are, so there is hard work needed to implement a fully functioning process. Which leads to a need for leadership. Innovation always brings out uncertainty and the top managers and directors of the company need to define a vision to make it all seem less scary. Can you help people see, feel and know this is all the most important issue facing the organisation? Can you make the vision so vivid and so compelling people naturally want to go into that future? That is often the hardest part of driving innovation.