Established companies do not easily reinvent themselves. History shows us that Innovation is often the strategy of startups – but not only is it important in getting to the top, innovation is necessary in order to stay on top. New talent, new techniques, and new products are all needed to stay abreast of the competition. In addition, having a champion within the organization is imperative. Innovation executives are often the facilitator of change, and the leaders responsible for the development of corporate innovation culture.
Recently McKinsey Quarterly published an article entitled, “The eight essentials of innovation,” by Marc de Jong, Nathan Marston, and Erik Roth. The article highlights a set of eight essential attributes from a survey of 300 companies that are present (either in part or in full) at every large company considered a high performer in product, process, or business-model innovation. The first four essentials help build the foundation for innovation. They are: Aspire, Choose, Discover, and Evolve. The next four ensure that innovation is not only successful, but repeatable as well. They are: Accelerate, Extend, Scale, and Mobilize.
The following is a quick summary of the first four attributes, with insight from the 10 imperatives laid out in “Robert’s Rules of Innovation”. You can read the full article published by McKinsey Here.
Whether it’s 8 essentials or 10 imperatives; having a structured and repeatable process from start to finish helps to ensure innovation is not only successful, it is repeatable and sustainable.
Aspire: According to De Jong, Marston, and Roth, “A far-reaching vision can be a compelling catalyst, provided it’s realistic enough to stimulate action today.”
Innovation and ideation is pointless without buy-in and support from top management, usually the CEO, who should acts as the chief innovation officer (CINO). As Robert Safian, editor of Fast Company says, “Inspiration Needs Execution”. Define innovation so the entire organization is moving in the same direction. Quantify your goal, whether it’s a sales figure or number of new products you hope to achieve, and this will help justify the resources to be allocated.
Choose: “Since no one knows exactly where valuable innovations will emerge, and searching everywhere is impractical, executives must create some boundary conditions for the opportunity spaces they want to explore.”
While creativity and ideas can be found in numerous places and in numerous ways, how you manage them determines the viability of a product or process. Ideation should be harnessed by a process with dedicated resources, and with NPD and LTD teams working together.
Discover: “The insight-discovery process, which extends beyond a company’s boundaries to include insight-generating partnerships, is the lifeblood of innovation.”
Keep an eye on new technologies as they come along, but at the same time, you must be aware of your customer’s wants and needs. It isn’t enough to tell your customer what they want, sometimes you have to listen too.
Evolve: “Business-model innovations—which change the economics of the value chain, diversify profit streams, and/or modify delivery models—have always been a vital part of a strong innovation portfolio.”
According to Doblin’s “Ten Types of Innovation”, creating new products is only one way to innovate – and on its own, it provides the lowest return on investment and the least competitive advantage.
Accelerate: “There’s a balance to be maintained: bureaucracy must be held in check, yet the rush to market should not undermine the cross-functional collaboration, continuous learning cycles, and clear decision pathways that help enable innovation.” As the authors relay, Innovation must have the ability to move through an organization in a way that creates and maintains competitive advantage, without exposing a company to unnecessary risk.
Suffice to say that companies are not naturally inclined to try new approaches without clear evidence that those approaches are likely to work. However, without risk, there can be no innovation. An effective innovation leader should encourage well-reasoned creativity and risk taking, while also practicing tolerance for failure. Fail fast and fail cheap, the saying goes. In 2014 Amazon’s innovation efforts fell short; and sure, Fast Company might have put them in the penalty box, leaving them off the list of “the 50 most innovative companies in 2015″ – but Amazon’s place in the market is all but guarunteed. In fact, even with the kerfuffle, Amazon and CEO Jeff Bezos are still a force to be reckoned with.
How would you answer the following questions in McKinsey’s Survey?