Companies can innovate successfully with simple rules and processes. Unfortunately, many organizations still do not have the innovation power which makes it a constant uphill battle. Companies need to embrace open innovation projects rather than having a fear of the risks, uncertainty and failure which are unavoidable side effects of Innovation.
Authors: Taimo Paavola & Brett Fifield
Corporate leaders need to create conditions for new growth by designing an exploration culture, building the right innovation metrics and creating the best practices. Ideas needs to be turned into a product or service that satisfies the current or future customers with speed and using minimal resources.
When painting a new future for a company the groundwork needs to be done well. It is important to create a culture of exploration. A playground where innovation is adopted and enabled. Simultaneously, it needs to fit into the company’s strategy.
As for many employers, an organization is a possibility to access so many resources that would not be possible in any other way in that specific industry. Often times, innovation projects are vulnerable and seen as an extra work that does not reap any benefit and can even be damaging for one’s career. According to (Osterwalder et al. 2020, 312) companies that lack innovation have at least some innovation blockers:
Leaders focus too much on the present results and there is no innovation strategy or portfolio management. Leaders are too focused on the current business model and exploring new is not a regular part of the work.
The reward system is focused toward the existing business model. Failure is not an option which kills experimenting new ideas. There is no autonomy for innovation teams and too many processes that makes it difficult to access resources or customers for prototyping new business.
Innovation does not have its own department or team. Organizations does not have similar practices like in finance, sales or operations. Processes, culture and KPI’s in place for innovation.
According to (Blank 2015) Innovators leave or start new initiatives depending on the organization. Innovation work needs time and a company that is a short-sighted for innovation makes the innovator leave the company. Innovation fails if leadership is focused too much on now and all the incentives and rewards are on current mission and goals. Organizations should align incentives and appoint chief innovation officer. Another mistake is that failure is not possible. Failed project is avoided at all costs rather failure should be seen as part of the process and pivotal moment to learn and progress.
Another blocker is a bottleneck that happens from the middle management. Top of the organization is giving a green light to start new initiatives and the bottom of the organization is ready to work on it but middle management sabotage or neglect it actively which eliminates the innovation programd. (Blank 2015.)
In order to cultivate and put the right enablers in place for innovation there are three main themes in each category.
- Strategic Guidance is given clear and transparently. Innovation strategy is important to define where and what to play.
- Resource allocation is available for Innovation and it is different than R&D budget. There is a budget and time allocation for everything to test business ideas.
- Portfolio Management for the whole innovation spectrum is in place. There is a broad innovation funnel for different innovations from sustaining to growth innovations.
- Legitimacy and power is in place for innovation and growth in the organization.
- Bridge to the core so that there is access to resources and partnerships from the organization to the innovation teams.
- Rewards and Incentives are in place around experimentation and growth made from innovation.
- Innovation tools and concepts are in use across the organization.
- Process management is dedicated to measure and have metrics to reduction of risks and uncertainty from an idea to a scalable business.
- Skills Development for innovation is practiced across the organization.
(Osterwalder et al. 2020, 314)
According to Blank (2015) in order to remove the bottlenecks of innovation, it is important to communicate the big idea across the organization to align a shared goal or mission. Also, sharing the information of the strategy and implementation. Organizations need to update the jobs and incentives for innovation and support those who are trying and failing repeatedly.
The role of innovation players are changing. As an example, young innovators should see large corporates as an opportunity to create a larger impact rather than selling themselves out. Also, the innovation environment plays an important to retain the talent in the organization. Corporate leaders need to examine if the innovation playground is enough hospitable. (Anthony 2012).
Too often innovation is seen as only accountable for specified department e.g. R&D or Business development rather than sharing the responsibility to every level and leader. As for leaders, It is important to train innovation related skills e.g. innovation tools and demonstrating appetite for new ideas, hiring and promoting for creativity and freeing time and resources for innovation. Leaders need to develop their competence towards understanding the principles of rapid experimentation and making sure that teams are motivated to innovate by eliminating excessive bureaucracy. (Hamel & Tennant 2015).
Innovation should be seen as a long-term investment which can be made with small bets and resources. Organizations should see innovators as essential partners for the future. Exploration culture surpasses strong bureaucracy making uncomfortable decision comfortable. This means that killing projects is not seen as a failure rather it is a learning outcome for the next innovation that provides substantial value for the customers and maximizes the market opportunity.
Anthony, S. 2012. The New Corporate Garage [Cited at 16 May 2021] Available at: https://hbr.org/2012/09/the-new-corporate-garage
Blank,S. 2015. Investment readiness level. [Cited at 15 May 2021] Available at: https://steveblank.com/category/investment-readiness-level/
Hamel, G. Tennant, N. 2015. The 5 Requirements of a Truly Innovative Company. [Cited at 16 May 2021] Available at: https://hbr.org/2015/04/the-5-requirements-of-a-truly-innovative-company
Osterwalder, A.Pigneur,Y., Etiemble, F.,Smith.A. 2020. The Invincible Company. John Wiley & Sons Inc. Hoboken, New Jersey.
Taimo Paavola is a master’s degree student in International Business Management at LAB University. Currently he works in executive education and helps individuals and organizations in developing their competences on leadership, innovation and digital transformation globally. His latest research focuses on combining two disciplinaries; Innovation and artificial intelligence.
Brett Fifield is a Principal Lecturer in International Business at LAB University of Applied Sciences
Illustration: https://pxhere.com/fi/photo/918233 (CC0)
Reference to this article
Paavola, T. & Fifield, B. 2021. Innovation Blockers and Enablers – 3 essentials for successful Exploration culture. LAB Pro. [Cited and date of citation]. Available at: https://www.labopen.fi/lab-pro/innovation-blockers-and-enablers-3-essentials-for-successful-exploration-culture/