ISSUE 03 2014
INNOVATION
21
Instead, true innovation stems from the leader of the company truly believing that without innovation their company is going to fail. Out of this comes a style and attitude that will then get mirrored across the company and resonate in turn all the way through to partners and customers.
The way that leaders behave in reality – as opposed to all the corporate rhetoric that they often spout – sends strong and unmistakable signals to their employees. Innovation of any kind is inherently associated with often unsettling change, while it also directs attention and resources away from achieving short-term performance goals. Some of the ways that leaders can explicitly engage in innovation include:
nAsking for substantial innovation in specific areas across the organisation, such as in the gathering of consumer insights, the delivery of services, or the customer experience.
nAdding innovation to the formal agenda at regular leadership meetings.
nSetting performance metrics and targets for innovation. This is especially important when department leaders are made directly accountable for encouraging innovation and metrics can be added to their performance assessments and linked to bonuses. These can be: § Financial, such as defining the percentage of total revenues that must come from new products, or requiring that a certain percentage of revenues come from products launched within the past two years.
§ Behavioural, such as insisting that a number of proposals or new ideas come from external sources. The trouble with this tactic is that, as so often happens when hard metrics are applied to human behaviours, just because you can measure something, it doesn’t mean that it’s actually important. Targets and checklists are all very well, but unless the criteria that they’re measuring mean something in the real world, all the planning and form filling required will do nothing for the eventual bottom line and just waste employees’ time and energy.
An appetite for risk and fast-failing
One key part of managing risk involves having the ability – and freedom – to be brutally honest about the prospects for an opportunity. Companies need to be brave enough to invest in great prospects and then wise enough to cut and run from these investments if they’re not working out. The concept of ‘fast-failing’ is especially important here. Having a corporate culture that rewards people for making difficult decisions in weeks, rather than dragging them out for months, saves money and resources and accelerates the process of bringing better ideas to market.
Targets and checklists are all very well, but unless the criteria that they’re measuring mean something in the real world, all the planning and form filling required will do nothing for the eventual bottom line and just waste employees’ time and energy
As Dean Elwood, chief executive officer of communications innovations specialist Voxygen says: “Fast-failing is part of a lifecycle to success, rather than failing per se. As an innovation outsourcer, we need to be talking to the most senior people in our client companies. They are able to look dispassionately at the top and bottom lines.”
CSP approaches to innovation CSPs can adopt many different models in their attempts to break through the innovation barrier and these tend to fall into a number of categories:
nOutsource your innovation – companies like Voxygen and others build partnering relationships with CSPs to help turn the CSP’s ‘concepts’ into reality – and in the process often completely reinvent the original concept. The trouble here is that the big companies often try to specify too rigidly what the innovative player is required to invent. For this to work, it’s better to set out requirements in broad strategic terms, rather than attempt to fully define them more formally.
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