Leading business innovation requires: creating the right environment, applying ‘accessible’ technology, and a methodical management approach.
BY FAISAL HOQUE
In business, innovation often results when ideas are applied by an organization in order to further satisfy the needs and expectations of a target market. The topic of ‘business innovation’ is vast and can differ significantly from person to person. Let’s define some context for our discussion purposes first. According to an IESE Business School paper:
“Business model innovation, which involves designing a modified or new activities system, relies on recombining the existing resources of a firm and its partners, and does not require significant investments in new technology R&D.”
In this context, business innovation:
- Focuses on the how of doing business, as opposed to what, when, and where
- Emphasizes value creation, as opposed to value capture
- Recognizes that partners can enable essential activities, as opposed to helping with non-essential tasks
Creating The Right Culture
It’s important to understand that sustained innovation is a journey, not a destination, meaning that an organization doesn’t stop innovating after attaining one goal. Innovation is a continual process of invention, reinvention, and discovery, and for this reason leaders must always set their sights on long-term goals.
Balance sheets alone don’t measure success, and operating based on quarterly returns or short-term goals usually does not work for achieving sustainable innovation.
It’s one thing to wish for long-term change, but a very different story to practice sustained innovation throughout an organization. Leaders need to create the culture and the process to realize sustainable value. And that requires the ability to:
1. LISTEN – Listen broadly for ideas through external networks. Listen to the customer. Listen to the front lines in your organization.
2. UNDERSTAND – Understand who your actual and potential customers are, what they want and need, what they will need, and why those needs have not yet been met.
3. ORGANIZE – Organize the innovation team to include those with a stake in the innovation, organize the innovation program, and organize the resources and investments needed to address the problem.
4. CREATE – Create an environment and capability for innovation by giving the team the ability to fail. Create many alternative solutions by leveraging the cascaded innovation lifecycle.
5. EXPERIMENT – Experiment and learn from failure. Conduct many experiments in parallel. Use prototyping and other iterative, feedback-driven techniques.
6. LISTEN AGAIN – Listen again to the customer to help them imagine. Use prototypes to elicit feedback. Listen to customer acceptance and buying criteria. Listen to what could go wrong, but don’t let the devil’s advocate take control.
7. DESIGN – Design the concepts to address customer-centric values like cost, intuitive use, ease of change, and sense of enhancement.
8. IMPLEMENT – Implement the final go/no-go decision. Consolidate or eliminate competing alternatives to a manageable number. Send concepts back for reinvention, retesting, or redesign. Implement the second stage of the innovation lifecycle: manifestation.
Discipline and innovation are not opposites, but complements. Establishing an innovation culture consumes a great deal of organizational energy in overcoming the forces of inertia and entropy. But once an idea has been successfully commercialized, respected champions emerge to drive new sources of the energy, creativity, discipline, and resources that sustain and grow an enduring culture of innovation.
Business innovation doesn’t have to be technical—but increasingly almost all business innovation is wrapped up in technology. Mobility, cloud computing, social media, and analytics have forever transformed global business ecosystems. Often termed the “digital transformation” of business, technology today:
Automates transactions and work processes, generating higher productivity and efficiency. Employees, customers or business partners can access services with speed, convenience, and personalization. Think of customer self-service (i.e. self-checkouts at retail stores, Internet check-in for airlines), employee self-service (i.e. self-management of benefits), and online sales.
Empowers fast, effective decision-making across the enterprise and its partnership network. Think of analytics (i.e. data mining, big data), intranets for dissemination of best practices, and extranets for rapid sharing of information with business partners. Empowerment enables the goal of being easy to do business with by providing front-end workers with intelligence and decision support in their interactions with customers, business partners, or other external stakeholders.
Facilitates real-time monitoring of operations and business partners through such practices as daily close, operational alerts, and dashboards with drill-down capabilities. Think of monitoring tools and enterprise risk-management processes. Business technology enhances transparency of business operations, rapid detection and resolution of management control issues, and accurate reporting of the key metrics of business performance.
Innovation can occur in any of these activities, but on a higher level technology can enable entirely new business models (for example, direct to the customer, multiple-channel integration), new products and services (for example, digital products and services, digitized customer service), and new modes of organizing work (for example, globally distributed work practices).
The focus here is not so much on specific technologies as much as on the development of digital options, the digitization of products and services, and on experimentation with new technology-enabled business ideas.
Successful organizations manage innovation from concept to commercialization so that good ideas not only get created, but also continually find their way into the products and services portfolio.
If an organization simply stands pat on its processes and products, it runs the risk of becoming obsolete. Worse, the absence of innovation means that an organization will lack any new offerings for when its current output reaches market saturation.
[Image: Flickr user Farrukh]
Original Article @ ISPIM.
About the Author: Serial entrepreneur Faisal Hoque is the founder of Shadoka. Shadoka enables entrepreneurship, growth, and social impact. He is the author of “Everything Connects”, “Survive to Thrive”, and other books. Follow him @faisal_hoque.
Copyright (c) 2016 by Faisal Hoque. All rights reserved.