Answering the question why do companies innovate is fairly straight forward. Most do it to increase productivity and create new value for their clients, their business, and society. But how companies innovate isn't as straight forward.
This blog examines what inspires companies to innovate through dialogue our team facilitated with senior executives who came together to explore enterprise innovation and how does innovation increase productivity. The executives participated in a joint meeting of the Conference Board of US Innovation Leadership Council and the Conference Board of Canada Council of Innovation and Commercialization, on which the author served as Chair.
Fifty-two executives, their guests and Conference Board staff were in attendance, coming from small and medium sized enterprises, Fortune 500, non-profit, government and academic sectors. What I observed was that everyone had something to share and much to learn from each other and across sectors.
How does innovation increase productivity
Exploring innovation and productivity isn’t for the faint of heart—our journey included looking at ways members have worked to drive speed, efficiency and effectiveness using agile and dynamic change; examining how members are striking a balance between the competing priorities to meet operational demand and drive innovation; and using foresight to create readiness for possible futures.
The meeting started with a humbling analysis from a Conference Board of US economist. His key messages were alarming:
- The global economy has been in a productivity crisis
- Advanced economies are suffering from demographic shifts—older populations and decreasing birth rates are hurting productivity
- Productivity growth has dramatically slowed down across the world and projected improvements look small.
The purpose of the meeting was to learn about how various organizations are working to improve productivity through innovation.
Delving into this topic wasn’t easy. Pre-reading was suggested—about six lengthy research studies, articles, summary documents and a long list of references and resources for those daring enough to learn more.
How Companies Innovate
For the most part, Council members are still learning how to be innovative. While there were many stories of success—and a few humbling stories of missteps—key takeaways are that while some innovation leadership efforts are implemented at an enterprise level with a global reach, most innovation efforts are being implemented locally and involve hiving off the innovation effort from other groups in the organization.
Organizations continue to focus on being “more innovative,” but few have defined what innovation means to them. Those who have, have made definitions to address divisional innovation programs, not a corporate innovation focus.
Innovation theatre still forms a key part of many organizational strategies. You’ve seen this—it’s “shark tanks,” innovation labs that have no clear function in the organization, using suggestion boxes and idea tracking software to generate ideas that aren’t tied to a specific problem, and training events that promise to teach you how to innovate when there’s no accountability, support or understanding about how to actually use it in the organization.
When an organization’s focus is all about the show and not about the act, it’s not engaging in innovation—it’s pretending to be innovative. And it doesn’t drive needed value.
We heard that, “Monetary incentives for employee innovation don’t work.” More significant motivators include involvement, recognition for contributions and giving staff who show true commitment to innovation a seat at the table when enterprise innovation plans are being made. Clearly, people want to be a part of something bigger and like the prestige that comes from being seen at the table.
Challenging Old Business Models
Global organizations are recognizing that their business models and ways of thinking aren’t working anymore. Using Business Model Canvas is recognized to help. A leader in one Canadian government organization shared a fantastic story about how they are using Business Model Canvas to rethink their business and challenge assumptions about competition. Even government organizations need to show relevance and drive value. In today’s socially connected, citizen-focused delivery of government services, if you can’t drive value, why are you here?
Hire Needed Expertise
There is a desire to integrate new methodologies and models for innovation, such as Agile, Lean and Design Thinking. However, without sufficient depth of knowledge in the organization on how to apply and leverage these methodologies and models, the promised returns aren’t being realized.
Many organizations are learning how to innovate by reading books, and lack the depth of experience to get the most out of these disciplines. It’s a learning process.
One leader told a story of a challenging organizational situation that required enterprise-wide change within his organization, and dared to ask:
As leaders, what is our responsibility to innovation?
He reminded us that “our responsibility is that we owe our people a vision, a future. And regardless of how much success you had in the past or today, how will you ensure that you have that success in the future?
Poignantly he suggested, whether things look good or bad on an innovation journey, as leaders we need to:
about the situation and where you are."
For the most part, leadership culture in innovation appears to be illusive or unrecognized.
What I observed in the dialogue and examples was members whose stories of their own efforts of internal innovation programs clearly demonstrated leadership. However, in a breakout group focused on exploring leadership culture, everyone seemed to be operating from an assumption that a leadership culture could only be realized if it came from someone else higher up.
Sure, a success condition for innovation is leaders who are involved in and leading innovation initiatives. You build an innovation culture by shifting individual behaviours. I've long said, you can’t delegate innovation.
The leaders I heard from were moving mountains to make innovation happen and didn’t realize that in that process they were in fact creating a leadership culture for innovation.
Who are the innovators?
Finally, my thinking was challenged. One of my Canadian peers was adamant in his declaration that not everyone in an organization will be an innovator. When I asked, "Why not?", his response was that not everyone had the skill to implement ideas.
In my experience and world view, everyone can contribute to innovation, and in that way, they are innovators. However, I do have to agree, it does take a special skill set to implement ideas. You can find out about new research about the Implementation skillset and three other critical skills people need to contribute to innovation by reading this blog - The Innovation Skills You and Your Team Need.
Building a Culture of Innovation
Most organizations implement innovation without an innovation framework. Without a framework that looks at process, product, people and context it becomes difficult to deliver the desired productivity or value to your enterprise. And it causes no end of challenges for your innovation team.
If you're building a culture of innovation on your team or across your organization, our ThinkUP Innovation Framework is an ingenious way to develop your team(s) while they work, and positively impact results by the next quarter.
The ThinkUP Innovation Framework Program teaches your team(s) the innovative thinking skills, tools and process needed to collaborate effectively, work across functions, respond creatively to change and add continuous value to your organization.
About BridgePoint Effect
Doing business in an evolving, dynamic environment brings unique, never-before-seen challenges for business leaders.
We have a framework that empowers leaders and their teams to know what to do when they don't know what to do.
A boutique consulting firm located in Toronto, Canada and doing business globally, BridgePoint Effect provides innovation and strategy consulting that helps teams win.
Our services are delivered at your-site, our-site, virtually and in blended on-site and virtual formats.