Want to be more innovative in your business? But struggling to take the leap and invest in your creative ideas?
It’s tempting to prioritise cost reduction and risk minimisation—especially during periods of upheaval.
However, you know great ideas and great companies are born during change and uncertainty.
As new technologies continue to evolve at an accelerated pace, innovation is a must-have across all industries. So much so your business’s future hinges on your ability to embrace new ways of thinking and operating.
According to Accenture, 82% of companies report that innovation is critical to their organisations’ continued success and growth.
For example, McKinsey research discovered that businesses that excel at innovation complete three times more digital M&A deals than their peers.
However, in the words of Roger von Oech (author, inventor, and speaker.)
“It’s easy to come up with new ideas; the hard part is letting go of what worked for you two years ago as it will soon be out of date.”
So, how do you harness the power of innovation to build resilience and a competitive advantage in your business?
What is innovation?
In a world of flux, businesses face new challenges every day. Increasingly, we know you can’t fix new problems with old solutions. So, companies must develop new products, services, and strategies to remain competitive and relevant.
When you think of innovation, the word creativity usually also comes to mind. Although these two terms are often used interchangeably, innovation in business is far more focused on driving value through unique ideas than straight-up inventiveness.
The Harvard Business Review identifies two types of innovation: sustainable innovation and disruptive innovation. The former refers to established larger organisations enhancing processes and technologies to improve current offerings for existing customers. The latter is a simplified and more efficient product or service offering that is more intuitive and provides a better customer experience, which leads to market disruption.
Why does it matter?
The last few years have shown to what extent fostering a culture of innovation is critical, especially during times of uncertainty. For example, COVID-19 illustrated how innovative thinking helped businesses adapt and navigate the challenges posed by lockdowns and work-from-home policies.
However, even with a successful business model, you shouldn’t rest on your laurels and stay stagnant. As we’ve seen from companies such as Kodak or Nokia, just because you’re at the top of your game today doesn’t mean you’ll still be tomorrow. If you want your business to grow and set yourself apart from the crowd, you must build an innovation mindset in everything you do—ensuring there is continual improvement and evolution of your business.
What are the main barriers to innovation?
There’s a difference between saying you want to be innovative and actually doing it. The trouble is many businesses need help being innovators. For example, a McKinsey survey shows 94% of executives are dissatisfied with their firms’ innovation performance.
That’s a shocking percentage and tells us a lot about how hard innovation truly is. It’s also not totally surprising—as humans, we don’t like change, and we’re not big fans of risk either. Yet innovation is exactly about experimenting, trying new things, and challenging the status quo.
Here are critical barriers to business innovation you should be aware of:
- The fear of failure
- A lack of strong leadership
- Short-term thinking and focusing too much on immediate gains
- Insufficient resources and capacity
- Lack of collaboration and a poor employee experience
Even though US businesses spent an eye-watering $538 billion on innovation in 2020 alone, many companies aren’t seeing the desired impact.
Why? In addition to the above list, there is also an underlying issue that is often overlooked: your working culture, day-to-day routines, and bad habits are key in stifling innovation.
How to create a culture of innovation
So, it’s time to break free from what’s holding you back from becoming a true innovator in your industry.
Here are 6 practical tips for nurturing an innovative business.
1. Emulate startups
As a leader, you have the power to shape the culture of your business. Lean into and empower your smaller teams, which can learn, change, and grow quickly. Aim for exponential returns rather than incremental improvements. Doing so can foster a culture of innovation and inspire your team to think outside the box.
2. Break free from hierarchies
Encourage feedback from all levels and customers for innovative solutions. Remember – hierarchies stifle evolution.
3. Engage in new ecosystems
Collaborate with external partners and customers on innovation projects. This can bring fresh perspectives, new ideas, and additional resources to your innovation efforts. Plus, this could include exploring possible M&A opportunities to help you acquire new technologies, capabilities, or market access, accelerating your innovation journey.
4. Experiment beyond industry norms
Align incentives with objectives and push for experiments beyond traditional boundaries. Collaborate with startups for bold ideas.
5. Embrace experiment failures
Embrace the idea that failure is not the end but a stepping stone towards success by fostering a ‘fail-fast, fail-often culture’. This will allow you to explore large-scale opportunities with more confidence by running low-cost experiments and using failures to drive new initiatives.
6. Leverage strategic tools
Use agile planning systems, digital workspaces, and function-specific tools like Slack, Miro, and Trello to enhance collaboration, improve efficiency, and manage projects more effectively. AI-based tools can also be explored for automation.
Final thoughts
Innovation isn’t a magic wand, nor is it something only some people can do—like any skill, it’s learnable (if you put the time and effort into practising it). This means nurturing greater collaboration across your teams and promoting innovation by encouraging employees across all levels of the business to experiment with ideas and solutions. If you need more support or you’re struggling to see results, don’t be scared to bring in specialists who can help you embed innovation into your culture.
Lastly (and most importantly) don’t be discouraged if your ideas don’t pan out. Instead, use your curiosity to better understand what went wrong and how it can be fixed or improved next time around. Remember, failure is not the opposite of success; it’s a part of it. The secret to innovation success is to keep doing it. Good luck!
