April 12

Innovation is the catalyst for organisational transformation

Change is widely seen as a constant in modern business life, but there are many reports and statistics showing the poor success rates of our organisational transformation efforts. For instance, a recent McKinsey report [1] puts the success rate at around 26%.

Whether it’s John Kotter or Clayton Christensen, there seems a consensus that nothing drives change quite like a crisis. Nothing motivates us to move more than a sense that our very being is at risk if we don’t act.

60% of businesses expect to lose 20% or more of their revenue over the next five years due to disruptive innovation unless they change the way in which they operate.

That statistic, from a recent A.T. Kearney survey, is quoted in chapter 8 of the 2016 global innovation index. [2] Equally however, the report also suggests that companies are confident that, when done well, innovation changes the game. Fully 80% of businesses expect their revenue from innovation to increase or significantly increase by 2020 with that increase being derived equally from product or service innovation, process innovation and business model innovation.

The catalyst for change

The problem is, what we want isn’t always what we get. What businesses expect and what is happening on the ground are two very different things. Success is defined as ‘an increase in global collaboration with a range of partners including customers’, and yet the index reveals that the majority of respondents rate their ability to identify, build and maintain innovation partnerships as fair at best. This ties in with a variety of other innovation reports which indicate that despite business leaders generally recognising innovation as being one of their top three priorities, there is still a gap between knowledge and action.

Perhaps one of the reasons for this is that innovation isn’t simply a thing or an action to be bolted on but rather requires a complete culture change across the organisation. As an article written for the intrapreneurship conference [3] comments; “A culture of innovation is one which actively encourages and supports creative, even unorthodox, thinking from their people, and allows innovation to flow through it.” When so much of what we do revolves around producing the products and services that earn us money as efficiently as possible, it can be difficult to shift our thinking to more radical endeavours.

If leaders want to develop groundbreaking new products and undertake the kind of transformation they aspire to, then this desire for innovation has to act as the catalyst for cultural change. Don’t get me wrong, this is certainly not easy, and this article isn’t going to give you a one size fits all suite of answers. It can’t, and the reason it can’t is that every organisation starts with its own unique level of innovation maturity and every organisation’s innovation journey will move towards its own unique identified innovation mix, approach and capability.

Starting the journey

However, what I can do (and what The Future Shapers are doing) is point you in the direction of articles, ideas, guidance and thinking which will help you to shape your own unique innovation journey. Articles such as one I came across in MarketingTech recently entitled ‘Defining the real purpose of marketing innovation.’ [4] That article talks about the importance of innovation as a culture, about having time and room to iterate and experiment and about combining creativity and implementation to solve a problem and create business value.

What the two articles mentioned also seek to do is to highlight traits which feature within the most innovative companies. These traits are also features of what I call ‘Next Generation Organisations’; those which seek to shape the future through using the core principles of design thinking to structure themselves. They’re traits such as intelligence, collaboration and adaptability.

  • Intelligence. Innovation-led organisations look to leverage intelligence as a means to delve below the statistics in order to truly understand their customers. But they also look to invest in learning, moving their people away from purely task-based training as they help them to build on skills such as collaboration, listening and observation as well as developing a holistic view of the organisation.

Building these people skills helps the organisation to move towards a deeper understanding of its customers, thereby opening up empathy-driven innovation, a subject I explore in more depth in a recent article for Trainingzone. [5]

  • Collaboration. As mentioned above, the 2016 global innovation index highlights the growing importance of collaboration as a means of delivering innovative solutions, but perhaps it’s worth reinforcing here the way in which collaboration for innovation is a very different entity from that which has traditionally been seen as business collaboration. Whilst in the past, businesses may have talked about collaboration in order to deliver an end goal, often the phrase was misused to describe simple teamwork between colleagues to complete a task. Collaboration is much more than that and involves a wide range of stakeholders from inception to market.

Collaboration for innovation looks to pull everyone (employees, customers, suppliers, researchers, and so on) not only into the endpoint delivery of a solution but also into the identification of the problem in the first place and into the creation of the optimum pathway. So organisations which are serious about building a culture of innovation will break down silos, open up pathways, prioritise and openly reward collaboration.

  • Adaptability. Thirdly, Next Generation Organisations are adaptable; embracing risk (and failure) as they seek to deliver genuine solutions in a timely fashion. The pace of change means that an organisation which seeks to perfect their product before they take it to market will be overtaken by disruptors who aren’t afraid to experiment and deliver on a minimum viable product basis. The fundamentals of design thinking, prototyping, sandboxing et al, all play a part in building agility and the ability to get great solutions to market faster than the competition.

So what do innovation leaders look like within a Next Generation Organisation? Well that’s a chapter in a book in itself but briefly innovation leaders focus on, and communicate, the big picture. They’ve moved on from talking about how innovation can deliver results and are prepared to do what it takes in order to reshape the culture to one that puts innovation at its heart. Building a culture of innovation isn’t rocket science but it does require organisations to establish innovation strategy, enable innovation leaders at every level and then embed innovation into the culture.

There is no one size fits all approach to this, and the exact pathway taken will vary from business to business, but unless CEOs and senior teams move on from taking the decision and actually act to start building a strategic approach to innovation then they better be prepared to sit back and watch their revenue disappear in the face of more disruptive innovation-led competitors. Have you taken the first step in establishing your innovation strategy? The transformation won’t happen overnight so perhaps it’s time you set your business on the pathway towards transformation and becoming a Next Generation Organisation.

This article was written by Cris Beswick for The Future Shapers and previously posted on 02/02/2017.

[1] http://www.mckinsey.com/insights/organization/how_to_beat_the_transformation_odds

[2] https://www.globalinnovationindex.org/


[4] http://www.marketingtechnews.net/news/2017/jan/20/defining-real-purpose-marketing-innovation/?platform=hootsuite

[5] http://www.trainingzone.co.uk/community/blogs/crisbeswick/rethinking-training-for-empathy-driven-innovation


Innovation Leadership, Innovation strategy, Next Generation Organisation

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