You can define ‘innovation’ in a number of ways.
One: the creation of new, useful ideas.
Two: the application of those new ideas in a way that adds value to an organization and/or its customers.
Three: the means by which a business stays relevant and competitive in an ever changing marketplace.
Whatever specific way one chooses to phrase the definition, at its core, innovation is the creation of something new. And in today’s world, where the pace of change is faster than ever before, innovation is the cornerstone of successful business. Without it, even the most well-established and recognizable businesses with the seemingly deepest moats will fail (remember Blockbuster?).
So why is it that, despite the clear commercial need for innovation, as many as 95% of product innovations fail and only 6% of executives are satisfied with their organization’s innovation performance?
In truth, it all comes down to leadership.
Leaders, whether in the C-Suite or mid-level management, hold the key to innovation success. Why? Because innovation needs: a company culture that makes space for new ideas, a symbiotic view of innovation strategy with business strategy, and employees who are not only inspired to take action but unafraid of making mistakes. All of which is the responsibility of leaders to get right.
Why does innovation fail in organizations?
It’s not often the quality of the idea that leads to innovation failure.
In fact, businesses aren’t usually short of good ideas — but it’s what you do with those ideas that makes the difference.
For good ideas to turn into real innovations, there needs to be a process of evaluation and application. Knowing the difference between a good idea and a good opportunity is key, and leaders need to learn how to recognize an opportunity’s potential and find a way to weave it into the business’s growth strategy.
And for many organizations today, this link just isn’t happening. According to PwC, 54% of companies struggle to align innovation strategy with business strategy.
Only when leaders can successfully synthesize innovation into the wider company plans and processes, will it be clear which ideas represent valuable commercial opportunities and what needs to happen to carry those innovations through to development and fruition.
Of course, there is a culture argument to be made here too.
To quote Carl Jung: “You can expect no influence if you are not susceptible to influence.”
This means that leaders need to not only be open and responsive to change themselves, but also to help create and nurture a company culture that makes space for new ideas to emerge in the first place.
If they fail to do so, innovations will either simply pass the organization by — because no-one was there to spot them and invest in their potential — or leaders, as the gatekeepers to change, will put the brakes on and stop innovative ideas from gaining ground.
Leaders must encourage, support and drive innovation — here’s how…
You may already consider yourself an innovator.
But are you an innovative leader?
Sparking innovation within your organization requires a lot more than an innovative mindset of your own, although that’s a good place to start...
Model an experimental mindset
Leaders set the tone for team dynamics, whether they’re on the board or line managing one or two employees.
As such, you should be seen to value innovation yourself — ask questions of the status quo, encourage your team to do the same, and don’t be afraid to put your name against an employee’s idea.
After all, creating psychological safety within your team — that is, the reassurance that your employer has your back, even in times of failure — is the necessary tinder for sparks of innovation.
From there, you can look to ring-fence dedicated office hours to innovation — as Google and Atlassian famously do. Another option is to create cross-functional teams wholly dedicated to driving innovation. Or, perhaps even better, bake innovation into your everyday ways of working.
Let go of your ego (and challenge other people’s)
In a study titled The Ideator’s Bias: How Identity-Induced Self-Efficacy Drives Overestimation in Employee-Driven Process Innovation, Professor Fabian Sting concluded that innovation failure often stems from managers overestimating or exaggerating their own innovation ability.
Put simply: don’t let your ego cloud your judgement.
Bounce your ideas off of your team members. Get them sense checked and validated where necessary. And make it clear to colleagues that they can feed in to your ideas, as well — who knows, they may even help build the opportunity into an even greater one!
But this goes both ways, too. Even if you’re a middle manager who works underneath a long line of other, more senior, leaders: don’t hesitate to question ideas which you think could be strengthened.
Innovation is a collaborative process. And one which thrives when everyone’s egos are left at the door — so make sure you lead by example and show your colleagues how it’s done.
Believe in your team and up-skill them if needed
An overwhelming 94% of senior executives say that people and culture are the most important drivers of innovation.
But, in the same breath, 64% say that lack of skill is restricting their company’s ability to innovate.
So what does this tell us?
For one, it shows that who your people are — and how you treat them — is a precursor for innovative behavior. Yet, where skill or competency gaps exist, innovation will struggle to flourish.
As leaders, it is your role to encourage innovative activity within your teams, but to also provide them with the resources, knowledge and training they need to make it happen. First, your belief will help inspire them. Then, they need to know how to channel that inspiration into action.
Encourage and celebrate small wins
Not every innovation will radically re-define the marketplace.
Ideas can be just as impactful on a more granular level — perhaps they help you reorganize a workflow, reach out to a new customer demographic or save you operating expenses.
In an innovative culture, all great opportunities — whether large or small — are to be celebrated. And, who knows, those small seeds of innovation may grow into revolutionary new ways of working.
Set performance metrics for innovation
How do you measure innovation?
There’s no simple answer, really. That’s why as few as a third of all Fortune 1000 companies have formal innovation metrics in place.
But what you may lack in formal innovation measures, you can make up in performance goals. KPIs that focus on the impact innovation delivers will encourage teams to strive for innovative behavior.
A word of warning here, though: innovation KPIs should be dealt with delicately. Without proper guidance and assessment, you risk ending up with innovation just for innovation’s sake. And this is where you, as managers and leaders, play such an important role.
Yes, you need to set SMART performance metrics for innovation — “To deliver a new customer-focused product feature to market, every quarter, for the next year” or “to workshop new ways to streamline internal processes at least once every quarter” for example. But you also need to train employees to be analytical about the innovations they invest in and establish clear criteria for evaluating the potential of these innovations to succeed.
So a key innovation metric should always be: that it fits, and helps strengthen, the company mission, purpose and message.
Know when it’s time to leave an idea behind
Occasionally, what started off as a great idea and opportunity, ends up losing its legs.
As leaders, you need to exhibit the ability to let go of ideas that no longer serve a strategic purpose. It’s better to drop it now, and ‘waste’ the resources spent already, than progress it further and risk spending more (think Sunk Cost fallacy).
And, indeed, there’s no such thing as an idea gone to waste. As Lingus Pauling, the great American chemist and visionary said: “The way to get good ideas is to get lots of ideas and throw the bad ones away.”
Innovation is an iterative process — taking elements of what worked from one idea, and feeding it into another. If you can teach this skill to your colleagues and employees, you’ll be paving the way for more impactful innovation in the future.
Again, this is where setting clear criteria for evaluating innovation ideas goes a long way. The good news is, that you don’t have to start from scratch. Through trial and error, experimentation and research, many innovation best practices have been established over the years and can be modeled in your organization.
For example, the Stage-Gate (also sometimes referred to as Phase-Gate) method, perhaps the most popular and battle-tested approach to managing and innovation projects. It’s out of the scope or our discussion today to dive into detail on this or other innovation methods, but suffice it to say, there are many ways to drive successful innovation and a wealth of freely available information out there on each one.
How innovative is your culture? A framework for analyzing organizational innovation
We’ll wrap this up with a reality check: how innovative would you say you, and your organization, are today?
According to McKinsey, there’s an eight-step test for assessing innovation in the workplace. Answer ‘yes’ to the majority of these questions and — great news! — you’re doing well. But, if like many, many organizations today, you can’t be sure… then at least you’ve got a clear framework for improvement.
Aspire: Does innovation-led growth have a vital role to play in your business strategy? And do you have clear KPIs and innovation metrics to reflect this?
Choose: How do you select which ideas are worth developing into opportunities? Is this analysis time and risk balanced? And do teams have the sufficient resources to select effectively?
Discover: How well prepared are your teams to spot valuable innovation opportunities? Do you have the necessary business, market and technology insights to fuel winning innovations?
Evolve: Do you, as leaders, help create new business models for innovation? Are these strategically sound and scalable?
Accelerate: Are your teams ready to take action? Have you the resources and processes in place to develop and launch quickly and effectively (to beat the competition, where relevant)?
Scale: When taking an innovation to market, are you able to launch at the right scale for products to reach the right markets and segments?
Extend: What external networks can you use to capitalize on innovations? Have you and other leaders used these networks to the best of your ability?
Mobilize: Lastly, but most importantly, are your people inspired, motivated, organized and eager to innovate, and innovate repeatedly?
So, how did you do?
It’s worth using the McKinsey framework to assess not just innovation on an organizational level, but on a team and personal level too. How well are you leading your teams to innovation currently?
And what do you need to do, to do better?
At Duuoo, we believe that great innovation stems from communication. As leaders, it’s important to keep one ear to the ground with every team — and indeed, every employee. This may sound like an epic task, but with the right resources in place, communicating, tracking and measuring your team’s impact is easier than you may think.
Our platform allows for iterative goal setting, on an individual and team level, and stores all your progress tracking in one place. If you need a quick, bird’s eye view of who is doing what, when and to how great an effect, you can have it. And from there, you can help steer your teams in the right direction.
Innovation may be a group task, but it requires dedicated leadership. To take better control of where your team is headed, sign up for a free 30 day trial today.