As a famous line (wrongfully attributed to Charles Darwin) reads: “It is not the strongest of the species that survives, nor the most intelligent that survives. It is the one that is most adaptable to change.”
The COVID-19 pandemic has challenged every single aspect of our daily lives; some of them will be changed forever as a result of the crisis. The same can be said about business: every single organization is under tremendous pressure to adapt to the new environment. Guessing about when we’ll be “back to normal” has been rapidly replaced with a quest for finding the “next normal.” Whether Darwin did or didn’t say the words quoted above, one thing is clear: only the most adaptable organizations will emerge from the current crisis stronger, not weaker.
Why Is Innovation Even More Important Now Than in “Normal” Times?
Everyone seems to agree that innovation isn’t a luxury anymore. It’s a necessity, it’s a means of survival. The mantra “Innovate or Die” may sound melodramatic, but it reflects the fact that the lack of innovation is a frequent cause of business failure. Just ask Blockbuster, Kodak, or Toys R Us.
Business innovation becomes even more important in uncertain times. And yet, many organizations react to crises by cutting down “dispensable” expenses - and innovation is often one of such “dispensable” items. This is a huge mistake. Gartner, a research and advisory firm, studied Fortune 1000 companies that outperformed their peers following the financial crisis of 2008-2009. What made all the winners look similar was that they invested in new growth opportunities instead of just cutting costs.
Unfortunately, sustainable business innovation proves to be difficult for many organizations even in “normal” times. Below, we’ll discuss a few common innovation “blockers” and the ways to overcome them - helping your organization to survive the crisis and become a new big thing in the post-COVID world.
The Peril of Aiming Low
The lack of a coherent innovation strategy still plagues a lot of organizations. It may appear strange but some corporate innovation leaders are still genuinely surprised to learn that different types of innovation exist (see picture below) and that they have different time horizons, resource requirements, and ambitions. Yes, ambitions.
Three types of innovation (by Steve Denning)
When designing their innovation programs, many organizations aim too low: they focus on incremental innovation, which is often a mere improvement of their existing lines of products and services. Confining their efforts to low-risk, low-return incremental innovation projects, these organizations dramatically reduce their chances of finding new sources of revenue. Worse, they open themselves up to disruption.
The solution to this problem isn’t easy, but it does exist: organizations should recognize the difference between incremental, breakthrough, and transformational types of innovation (a.k.a. the 3-Horizon Model of Innovation) and fully embrace the practice of Integrative Innovation Management. Spreading your innovation “bets” among projects of varying scope, longevity, risk, and, yes, ambition will eventually help you score big. That’s how Google has transformed itself from a two-person, dorm room-based startup into one of the largest companies in the United States.
Does Innovation Need “Structure”?
Over the past years, many corporate innovation leaders have mastered the art of talking about innovation, delivering well-rounded answers to friendly questions in non-confrontational surveys and interviews. Unfortunately, as I mentioned in the previous section, a frighteningly large number of them still demonstrate a weak knowledge of the very fundamentals of the innovation process. Worse, they take a hands-off approach to innovation management, proudly claiming instead that “in our company, innovation is everyone’s job.”
Exacerbating this dangerous trend is a wide-spread belief that innovation management doesn’t need structure. Moreover, one can often hear that structure prevents companies from being innovative because structure supposedly “stifles” or even kills creativity.
Nothing could be further from the truth. A 2012 study by Accenture found that organizations that have a holistic, formal innovation structure consistently report better outcomes of their innovation programs. As Tracy Brower wrote in a recent Forbes article, sustainable innovation can be learned by organizations if they succeed in putting together a balanced combination of structure, processes, and incentives.
There is no reason to confuse structure with bureaucracy. At the very beginning of the innovation journey, all that your organization needs is an innovation charter (or, at the very least, an explicit verbal buy-in from the top management), a steering committee, a budget, and a dedicated innovation team. But as your organization becomes more and more innovation-mature, the structure will transform into something else. It’s called culture.
Are Innovation and Ideation the Same Things?
Another popular mistake that corporate innovation leaders often make is equating innovation and ideation. True, innovation starts with collecting ideas, but it doesn’t stop here. Innovation can only occur if the collected ideas are properly assessed, validated, tested, and finally implemented into new products, services, and operational improvements. Ignoring this all-important implementation part of the innovation process, the one that follows the ideation part, simply means a misrepresentation of what innovation really is.
Yes, there is no innovation without ideas. But the reverse isn’t true as evidenced by numerous examples of organizations collecting zillions of poorly defined “ideas” and not knowing what to do with them.
Instead of spending time and limited resources on generating numerous but useless “ideas” organizations should master the art of disciplined problem-solving. In this model of innovation (which I call the “top-down” model), the focus is on problems. The organization’s leadership formulates problems that are crucial for the organization to solve and then moves them down the ladder for employees to suggest solutions. Various venues could be used for this purpose: innovation jams, innovation contests, or challenges posted on internal and external innovation networks.
Formulating problems needed to be solved lies in the core of the innovation process. Otherwise, you’ll be finding the right solutions to the wrong problems.
A Couple Words about Leadership
And this brings us to the all-important question of leadership. I can’t overstate it: nothing will happen in any organization aspiring to become an innovation leader without active personal involvement from the C-suite.
At the risk of oversimplifying, let me say this: in order to survive in the current business environment - much less to become “the next big thing” - organizations must innovate. With a strong leadership in your organization, you’ll have innovation. Without leadership, innovation won’t happen. It's that simple.