Innovation never sleeps. It evolves, it accelerates, it takes different forms. In fact, organizations that want to unleash innovation are wise to discover what stifles it so they can remove the constraints.
For example, innovation historically resided in research and development (R&D) departments, but now organizational leaders are more inclined to behave as through innovation can come from anywhere. In fact, some organizations believe in democratizing innovation so much that they encourage experimentation, host competitions and may even provide financial incentives.
According to Jeff Wong, global chief innovation officer at multinational professional services network EY, CEOs are realizing they can't rely on a traditional innovation team when the context of company's competition has changed. For example, retail banks used to compete against each other by stealing each other's accounts, but the same tactic won't work when the new competition is cryptocurrencies or a social network that offers stored value or investment alternatives.
"I think, pre-pandemic, that everybody understood that they were seeing the early signals of competing against a new competitor and at some point, they would be here," said Wong. "What I'm hearing from CEOs and boards is a realization that a lot of new competitors have appeared so the pathways to innovation have changed. [Traditionally], they were just trying to compete better against existing competitors. Now they also have to compete against a new set of competitors."
Five years ago, EY didn't have an innovation function. In the first four years, that group added more than $1 billion in revenue. In the beginning, the group started to build project, by project, then it had more projects, an AI team, a blockchain team and a data team (the CDO and CAO report to Wong).
"Three and a half years ago I started an AI team, but we've had to radically scale it, so we now have AI teams that sit in other parts of the organization. They all feed off the core team that sits in innovation, but we had skill well beyond just this interesting thing that sits in innovation," said Wong. "Now it has to be a technology we use and infuse in all parts of our organization whether it's directly in the service side or our technology teams."
Now, there are also three separate innovation investment areas that include an incubator, investments focused on near-term growth areas, and disruptive innovations that could be something entirely new or something that's applied to an industry or type of business for the first time.
"I think the difficulty that most people find in their evolution is that each of these parts requires something a little different -- a different set of objectives, a little different structure to manage it, [slightly] different criteria to understand what a good or bad investment for that particular part of innovation," said Wong.
Of course, lots of companies are innovating and they all have their own "secret sauce." Following are some other insights that can help move the innovation needle.
1. Balance Creativity and Discipline
Jeff Wordham, a principal of Deloitte Consulting, a member of Deloitte Digital and the leader of Doblin, Deloitte’s design-led innovation team, believes effective innovation leaders must establish the systems, talent and metrics needed to design, test, and scale inventive new products, services and experiences.
"Our secret sauce is how we bring together multi-disciplined teams of designers, creatives, behavioral researchers, technologists, and strategists from the start," said Wordham. "To launch meaningful impact and change in the organization and the world, innovation requires a disciplined and sustained approach."
Deloitte Digital maintains a portfolio of innovations that are 70% aligned with its core business, 20% business adjacent, and 10% transformational. Wordham said the results are the inverse as the greatest value is driven from commitments to transformational innovation.
2. Embrace Agility
Change-averse companies have been slow to embrace digital transformation. They were also the last to accept the fact that the pandemic wasn't going away any time soon. Their hesitation to act has made it more difficult for those companies to stay competitive.
"It's crucial to remain agile, to trust your people, and to work collaboratively with them to navigate the challenges, and it's absolutely necessary to constantly enhance the customer experience," said James McCann, CEO and executive chairman of 1-800-Flowers. "We have been focused on identifying ways to engage with our teams as well as our customers beyond the transactional process, helping them maintain their own relationships, share with others, express themselves and connect to celebrate moments big and small."
For example, the company launched 1-800-FLOWERS.COM Connection Communities, a peer-to-peer network that helps guide people through meaningful and difficult life events by connecting them with others who have walked the same path, which has helped address the loneliness some have experienced during the pandemic. 1-800-FLOWERS.COM also launched a Connectivity Council that comprises leading psychologists and mental health professionals and other programs that demonstrate the company's empathy for the challenges employees and customers face as they attempt to balance work from home situations with child and elderly parent care.
3. Empower Employees
Highly innovative companies empower their people -- not some people, all people.
"Many of our executives started off just as employees. We gave them enough freedom to do their work, and they [came up with] some great ideas which led to promotions, company growth and better results," said Sagar Velagala, growth director at spend and travel management solution provider Lola.com. "Our initial idea was to create simple travel and expenses software, but it eventually grew into something much bigger."
4. Provide Executive Support
Great ideas often don't come to fruition because employees don't feel free to innovate. Truly smart people make a point of surrounding themselves with smarter people. Similarly, the best leaders aren't commanders, they're servant leaders.
"Great innovation comes from hiring diverse, smart, tenacious people and then giving them the autonomy, safety and support to bring new ideas to life. This matters greatly because great innovation was never borne out of micromanaging, group think or creating a culture of fear of failure," said Antonia Hock, global head and chief executive of The Ritz Carlton Leadership Center. "Great innovations are borne of creativity, inspiration and confidence."
5. Accept Failure
Innovation requires experimentation. While organizations are always happy to embrace the upside of a success, some refuse to accept the failures.
Mark Webster, co-founder of online marketing education site Authority Hacker, said he actually encourages mistakes because if employees aren't making them, they're probably not taking risks or trying to innovate.
"We will never penalize an employee for slipping up or accidentally doing something wrong provided they learn from it and adapt to overcome the issue in the future," said Webster. "If they're just following a script and fulfilling their daily tasks to the letter, we'll never innovate. Innovative thinking among all our employees is crucial to our success."
6. Keep an Open Mind
Chargebacks911 co-founder and COO Monica Eaton-Cardone is a strong believer in keeping an open mind because without it, there's no room for new ideas.
"[S]uccessful innovators must be smart enough to know when they're being dumb. It's not always easy, because we tend to favor our own ideas and [are] slightly more critical of others," said Eaton-Cardone. "We issue weekly and monthly employee awards where great ideas are acknowledged and rewarded. No matter if it's your first day or the first day of your second decade, we have a process for new ideas to be submitted at morning meetings, planning sessions, team conferences or even anonymously."
7. Help Employees Discover Their Talents
Most individuals are pretty aware of their strengths and weaknesses, but they may not realize they have a latent talent for something. Daivat Dholakia, director of operations at GPS fleet tracking software provider Force by Mojio, believes that organizations that want to innovate should help their people identify their talents and then let them run loose with them.
"Some businesses get so fixated on the end product that they fail to leverage the full abilities of their team," said Dholakia. "I've found that by setting aside time to let our employees suggest and work on their own ideas for positive change we bring a lot of great innovation to our daily work routine. Asking people to clock in, check off boxes, and clock out isn't going to accomplish that."
8. Align Incentives
Companies are in a constant state of change and yet, they often fail to realign employees' incentives to reflect the company's goals. While it may seem like an obvious thing to do, many organizations are missing this important point.
"Economic incentives have extraordinary power over outcomes and we take that really seriously. It's integral to our approach to goal-setting and career growth programs," said Stafan Kalb, co-founder and CEO of Shelf Engine. "Our ability to manage hundreds of millions of dollars in inventory for the largest grocers in a direct outcome of innovation within our operations, engineering and data science teams."
Shelf Engine predicts the amount of perishable goods to order. In 2019, the company shifted from a SaaS-based solution to an Outcomes-as-a-Service (OaaS), which requires scan-based trade and order automation. Now, the technology runs in the background. Better still, Shelf Engine guarantees the sale of every item it manages and orders for the grocer, buying back all unsold products and virtually eliminating inventory risk.
9. Stay Ready for Innovation
Jeff Zhou, CEO of Fig Loans, a payday loan alternative, thinks businesses need to be ready to jump at an opportunity.
"The secret to continuous innovation in our eyes is working from the mindset that you need to stay ready, so you don't have to get ready. The perfect opportunity is usually a matter of timing and you need to operate as if that opportunity is here today," said Zhou. "This is important because it forces us to stay on top of our industry's changing landscape, pay attention to what our customers truly need and give employees a dedicated platform to share ideas."
10. Play a Long Game
In today's era where popular mantras include "fail fast" and "move fast and break things," one may conclude that patience is overrated.
"Being truly innovative takes stamina. It's not a sprint. That's the secret sauce and it should be the mantra," said Walid Negm, EVP and chief research and innovation officer at Capgemini Engineering. "You need grit and perseverance to stick with an innovation. Incubating a new business or social outcome with a go-to-market strategy must be an operational principle of the organization, linking with the rest of the business. Staying the course, as contradictory as it sounds, means pivoting and changing direction."
Check out other InformationWeek slideshows.Lisa Morgan is a freelance writer who covers big data and BI for InformationWeek. She has contributed articles, reports, and other types of content to various publications and sites ranging from SD Times to the Economist Intelligent Unit. Frequent areas of coverage include ... View Full Bio