I always like to start with the wise words of reflection from an industry leader who has experienced the challenges we will explore today:
"Growth is painful. Change is painful. But, nothing is as painful as staying stuck where you do not belong." N. R. Narayana Murthy, Co-founder of Infosys
No organisation can stand still.
You need to grow. Your ability to grow as an organisation is essential for your long term existence. That growth will facilitate funding investments and acquiring assets. But most of all, it helps attract new talent – the talent you need to be more innovative as an organisation.
You also need to become more efficient, effective and productive and you need to be resilient and better equipped to deal with change and market disruption. Again, the benefits of growth will help you achieve this.
The other side of the coin is that if you do not grow, you stagnate and your organisation potentially becomes obsolete.
A classic example of this was Blockbuster Video vs Netflix. The legend (can you become a legend after only 14 years?) typically describes Blockbuster as a set-in-its-ways organisation with an outdated business model that was humbled by the tech start-up Netflix, who saw the future of home entertainment becoming an online service.
Actually, this is not really the full story (see CNBC – “How Netflix almost lost the movie rental wars to Blockbuster”) but in summary, Blockbuster didn’t react quickly enough when Netflix started disrupting the movie rental market.
Let’s unpack how an innovation culture can be utilised to make the company bigger and better. Taking one at a time…
Business Growth
I’ve been involved with many clients during my career and have repeatedly witnessed a common challenge - growing a business in markets that are becoming increasingly more competitive and disruptive.
Having an innovation culture in your business has the potential to drive business growth. By continually improving and expanding your offerings, your company can offer what the market needs, tap into new markets and increase market share.
However, to do so requires constant innovation built on a wide foundation of knowledge gained from both internal and external sources.
So let us look at the role of innovation in fuelling business growth and examine why it has become a strategic imperative for organisations across industries.
In today's overcrowded market places, customers have many different purchasing options to choose from, and a business must find unique ways to stand out. A company needs to carve out a niche for themselves and attract a loyal customer base by:
introducing products or services that offer distinct advantages or solve problems more effectively
changing the way you interact with your customer base during the sales and after-sales process, effectively enhancing the true meaning of customer service.
This differentiation can result in increased market share, higher customer satisfaction, and ultimately, business growth.
But how does this tie into innovation in business?
An innovation culture has a different mindset at its heart. From across the organisation, focus moves on from “what we do today” and time and space are given to exploring topics such as:
How we can do things better, more efficiently, for effectively?
How can we make our products better, more relevant, more appealing?
How can we develop, change, and implement those products or services to ensure they meet their objectives and aims?
How can we make our customer interaction and the whole customer journey better?
Take the example of an innovative organisation tackling the challenge of growing the business through new markets and revenue streams. Thought should be deployed to explore different business models and identifying underserved or unmet customer needs, thus helping uncover fresh opportunities for growth.
Let’s go really wild. Thinking outside of the box can generate disruptive innovations that could potentially reshape industries or create completely new markets. Companies that are willing to take risks and challenge conventional thinking can position themselves as market leaders, capturing significant market share and driving substantial growth.
Sometimes this has been done by individuals or a small groups of people, and the world of business has a Roll Call of Fame that lists several hugely successful entrepreneurs that have built huge successful business empires through being visionary: Elon Musk, Anita Roddick, Bill Gates, Steve Jobs, to name but a few.
But every day, many organisations address challenges like these using a workforce enthused with a culture of innovation.
This is Innovation | Democratised
Efficiency & Productivity
Moreover, innovation plays a key role in improving efficiency and productivity in operations and business support.
Known as Process Innovation, this involves reimagining and optimizing internal business processes to enhance efficiency, productivity, and cost-effectiveness through simplifying operations, reducing waste, eliminating bottlenecks and introducing new methodologies and/or technologies.
Wait – I hear you say! Isn’t this just simple process reengineering or continuous improvement?
Well, yes, sort of. But when used as part of an innovation culture, those rigid Lean and Six Sigma tools and frameworks can be put to much better use by combining them with the power of free thought and ideation.
The more complex the process, the more innovative thought helps to provide solutions. As such, process innovation is particularly relevant for industries with complicated production or service delivery methods, or complex supply chains.
An often-quoted example of process innovation is Toyota's lean production system. Through implementing principles such as just-in-time inventory management, continuous improvement, and waste reduction allowed Toyota to achieve high-quality production, reduced costs, and gave a faster time-to-market. Their innovative methods set new standards for the entire industry, giving them a competitive edge and revolutionising the automotive manufacturing industry.
So, by adopting new technologies, automating repetitive tasks, and optimising workflows, your organisation can achieve greater efficiency and free up resources to invest in growth-oriented initiatives to deliver competitive advantages, increased profitability and accelerated business growth.
Resilience
All organisations have to cope with the unexpected challenges they didn’t foresee. One of the biggest upheavals to the business landscape that I have ever witnessed was the impact the COVID pandemic had on businesses, their markets, and the needs and requirements of their customers. That is an example of extreme disruption but there are other examples such as the impact of the financial crisis of the late 2000’s!
Disruption hits companies in different ways and not all are negative. Skills and experience in transformation and turnaround are in demand in both growing and challenging markets. And we have all read about the huge profits made by some organisations during the COVID crisis.
But one thing is for sure. The more your organisation can cope with disruption, the better your chance of survival and perhaps you would be better positioned to capitalise on unexpected growth opportunities.
In other words, being agile and innovative enables nimble strategies and an adaptive culture.
By nature, an innovation culture fosters adaptability and resilience, characteristics that are seen as essential qualities for businesses operating in volatile, unpredictable, and disruptive market environments. As industries undergo rapid transformations due to technological advancements and shifting consumer preferences, organisations must be agile and capable of adapting to change.
Get in the starting blocks
To get yourself in such a position you and your organisation need to:
“Be Prepared” - As it says on the Scouts Motto. You probably already have a plan for short and long-term eventualities, covering areas like disaster recovery, supply chain challenges, etc., especially after the pandemic. Changing how you do things (and sometimes what you do) helped you to adapt to the events of 2020. But sometimes, plans are not available or not detailed enough to be enacted quickly. An Innovation culture with agility at its core will give your organisation the solid foundation to both think through and get through disruptive challenges.
“Be Adaptable” – Employee adaptability and versatility is not something that you can get off the shelf at Tesco! For example, if your organisation currently uses a command and control management structure, you cannot expect employees to be as versatile as those who operate in an environment where innovation and agility are embedded. They just won’t be used to the experience of pivoting roles quickly enough to keep the wheels moving! You also need to be aware that how far versatility goes sometimes comes down to the industry you are operating in. Risk and Regulation can really stifle versatility, agility, and innovation.
“Be Internally Collaborative” - Organisations that work in silos really do have a huge inherent problem. Divisions or departments that tend to operate independently also create an environment where their teams avoid sharing information and are themselves segmented from the flow of information from other parts of your business. Naturally, this form of structure (and I have seen many) exacerbates the impact of disruption. Ta-da! - Innovation to the rescue. An agile innovative organisation operates in a collective collaborative way speeding the flow of information and subsequent action.
Case Study: On a recent assignment, product innovation squads were deliberately designed to bridge between operating divisions and sub-divisions of a business to overcome development duplicity and to scale product innovations across the whole business. Sometimes it’s the drive to innovation that gets rid of the barriers themselves!
Challenge of change chaos
As a note of caution, I often see organisations with multiple transformation initiatives running concurrently, each one being limited in scope and very highly focused such as implementing a new ERP system. It is natural to limit the scope of business change as everyone has resource constraints, but this makes transformation activity within business an intermittent, sporadic stop-start activity by nature.
What we are witnessing now is the rise of the continuous transformation concept, together with the increase in the number of Transformation Director or Chief Transformation Officer roles. Whether that is due to the adoption of continuous transformation or the use of a buzzword in a job title, I am unable to say, but all organisations need to consider continuous transformation as a way of life in these fast paced markets, which in turn is the delivery mechanism of an innovation culture.
“The only way you survive is you continuously transform into something else. It’s the idea of continuous transformation that makes you an innovation company”
Virginia Rometty, Ex-President & CEO, IBM
Continuous transformation and a culture of innovation go hand in hand. By fostering an innovative culture, organisations can cultivate a mindset of continuous improvement and agility, enabling them to stay ahead of the curve and navigate disruptions successfully.
So naturally, you should consider blending the dawn of an innovation culture into the change activity currently happening in your business. Start using innovation techniques to enhance design into ideation. Expand the depth of skills and experience in delivery teams by co-opting team members from around the business on a part-time basis, bringing diversity into all elements of delivery.
This way, you will have started down the track of innovation.
Conclusion
We have explored how innovation can help drive business growth, make your processes more efficient and productive and how the basis of the way you work with innovation makes your organisation more resilient for the challenges yet to be faced.
But beware. Expect disruptions and challenges to the norm to accelerate and intensify. The time to drive innovation into your business is now!
Be prepared, be ready, and democratise innovation!
In my next article, I want to explore how innovation helps you give your customers what they want, how they want it, and when they want it.
Because the Customer is always right!
Until the next time…
I’m sure that after reading these blogs on innovation in the workplace you will have a backpack full of questions regarding the “What and the How” of innovation and maybe feeling a bit stuck.
Never one to leave you in the lurch, I am always happy to try to have a brief chat and address your questions. Just reach out and let’s see if we can bring resolution to what is keeping you awake at night. Email me at gary@rokaboat-emea.com and let’s arrange a virtual coffee or connect with me on LinkedIn - Gary Thompson
And one other thing – I would love to hear your feedback on this article. My father had a shop and from being a child I was taught to listen to the customer, so I welcome your comments. It’s time I practiced what I preach!