Businesses today are changing and they are changing fast! Business strategies and methodologies of last decade are already proving obsolete. Culpable for this are the ever-vacillating customer needs and the technologies solutions that meet these needs. At the core of managing these changes is business innovation. Business innovation (different from technology innovation) essentially refers to an organization’s process for introducing new (or modifying existing) ideas, processes, services or products with the ultimate aim of creating more value for the customer. Organizations that embrace business innovation benefits from these technology advances and new customer needs while those that are slow or reluctant are left behind.
Many organizations experience challenge innovating. More often than not this is due to these organizations’ structure and culture. A top-down pyramid organization where employees do not have autonomy but must receive ‘approval’ from superiors for virtually every initiative stiffens innovation. This fixed and rigid structure breeds a culture of fear where employees are satisfied in the safety net of status quo rather than risk the adventure of innovation. Organizations that have these don’t-touch-it-if-it-works folks as managers soon become antique and will be shocked when a smaller but smarter startup comes to disrupt them.
Business innovation is everyone’s responsibility but business leaders can act as catalysts breeding innovation in every department. They can envision the business future (strategy), seize business opportunities on time (sales), insist that things be done better and institute an innovation culture in the organization (operations).
Business leaders who wish to institute a culture of innovation must take these things to mind:
- Innovation should be customer-centric. The customer is the boss that pays everyone’s salary. He determines what value is. Business innovation should therefore be targeted at creating new values directly or indirectly for the customer. Every action should be traceable to ultimately creating value for the customer. A business should consistently ask itself what value am I delivering to my customers? How can I do more? How can I deliver these values faster, easier, and cheaper without affecting my profitability? Today, FinTechs are disrupting banks everywhere in the world because they offer banking services to customers in a faster, easier and cheaper way.
- Innovation should be deliberate and structured. To make innovation a culture, business leaders must take responsibilities to structure it and be deliberate about it. In creating any structure to support innovation, the following must be taken into consideration.
- Idea generation – a new idea can be inspired from an existing idea or from the scratch. Apple created iPod 3 years after MP3 players (The Atlantic). On the other hand inventing Scotch tape was a brand new idea. Richard Drew saw a need for a tape that would not waste paints (Priceonomics). Leaders must understand this innovation dynamics and put in place structures that leverage existing innovation or permit sufficient research to create new ideas.
- Idea screening and advocacy – not all ideas make sense initially (traditionally idea generators don’t always have the skills of advocacy) and not all ideas are worth implementing. Business leaders must learn how to navigate this thin line between ingenuity and stupidity. Experience and intuition often times are the leaders’ best judge. The goal of an idea screening and advocacy process is to let all ideas have fair hearing before deciding to promote or neglect it. Organizations interested in building an innovation culture must have policies that guide this activity. Creating transparent decision process and ensuring employees have sufficient feedbacks as to why their ideas were neglected or promoted is essential to sustaining the innovation culture.
- Idea piloting – even with the most experienced and intuitive business leader, it is still necessary for the ideas to be tested before a final go.
- Idea implementation – on successful piloting, idea should be implemented. Business leaders’ role at this point is to mitigate roadblocks using their executive powers. The details and strategy of implementation should be left to the idea generator or an implementation team. This offers a tremendous learning opportunity from which another innovation can be birthed.
Companies of all sizes must understand that their company’s competitiveness depend on their capacity to innovate and adjust efficiently to business changes. Smart organizations decentralize innovation by deliberately creating a culture and structure that breed innovations.
Organization in this age have only two options: innovate or die!