The Four Key Elements of Business Innovation. 

by Capacity Development, Innovation

We’ve all heard stories about breakthrough innovations. Stories about disruptors who grab the headlines and garner eye-popping valuations. Stories of entrepreneurs who end up on the cover of Bloomberg Businessweek, Fortune, Entrepreneur and other publications and go on to write best-selling books showing the keys to their success. 

For many people hearing such stories, the message from them might seem to be that, through genius or good timing, innovation is reserved for a select few. Nothing could be further from the truth. At the heart of it, innovation is simply a way to solve problems, and in so doing, reinvigorate the company and create new value and growth. 

This may be through a new market strategy, a new product, a new method or process, and so on. Innovation at its simplest form, is about coming up with (or listening to) creative ideas from your team, and then implementing them successfully. When a business innovates, it can either improve its already existing products, methodologies and processes, or it can create new ones from scratch.

If you overhaul an inefficient process, by using customer feedback to breathe new life into a stale product— you are innovating. If you change the materials of your plastic components to biodegradable oil-based plastics like Logo did, you are innovating. If you can figure out a way to extend the ranges of your electric car batteries, you too are innovating.

All organizations and business owners should strive to understand the innovation process, why it is important, and how they can leverage it in their own businesses. To do so, it’s important to focus on the four key elements that make up the innovation process. These are: 

  1. Collaboration
  2. Ideation 
  3. Implementation 
  4. Value creation.

1. Collaboration

Teamwork is vital in getting things done. In today’s globalised and digital world, the challenges are more complex and it has become increasingly important to bring on board more diverse minds and to break down silos.

The collaboration process is rarely easy. This is because competition and conflict often dominate the landscape within and among groups. As most people tend to avoid tension, what we mostly end up with in organizations is a peaceful (or less than peaceful) coexistence, and not collaboration as intended. For this reason, now might be a good time for re-thinking collaboration.

How could new approaches to collaboration positively influence innovation in organizations? 

To begin, it’s important to understand the 3 aspects involved in collaboration namely: relationships, processes and outcomes. Collaboration means people working together (relationships) towards (process) accomplishing a common goal (outcomes).

Collaborative relationships are important because it usually takes more than one person, group or organisational function to address the challenges faced by an organisation. There is a good chance that the solutions needed may not be found within existing relationships in a department. The relationships developed across different functions, disciplines, areas of study and practice may yield greater returns than those in the same department. Interdisciplinary networks, particularly those with professionals of varying ages and different ethnic groups and cultures, often reveal answers to persistent challenges and provide insights where none were easily apparent.

Re-thinking collaboration means finding how individual intellectual efforts, such as mobilising the creative capital of each individual, can generate value for the company.

For successful collaboration there needs to be more than just working together. It means having the ability to think together and allowing each other to share these thoughts as you act on complex projects. For there to be innovation from collaboration, it’s important for the people involved to:

  1. Focus and align—What is the problem you are trying to solve?
  2. Listen and explore—What do you know that I don’t? How can it be applied in a new way?
  3. Learn and adjust—How can you learn from each other? How does it affect the views you had?
  4. Link and leverage—How can you use this new information to solve the existing challenges?

2. Ideation 

Fresh, new ideas help your organisation stand out. With the ever increasing competition for resources and market share, organizations must differentiate themselves in order to survive.

Ideation is the process through which you generate ideas and solutions through sessions such as Sketching, Brainstorming, Prototyping, Worst Possible Idea, and other ideation techniques. 

According to D- School, a design school based at Stanford University, “Ideation is a stage in the design process where you concentrate on idea generation. It provides both the fuel and the source material for building prototypes and getting solutions into the hands of your final users.”

Done well, ideation is often the most exciting stage in the innovative process. This is because during ideation, the main aim is to generate a large quantity of ideas that the team can then filter and cut down into the best, most innovative or most practical ones so as to inspire new and better designed products and solutions..

Ideation will help you:

  1. Get the obvious solutions out of your heads and therefore increase the innovation potential of your solution.
  2. Ask the right questions and design solutions with a strong focus on your users needs from the insights you have about them.
  3. Bring together different strengths and perspectives of your team members.
  4. Uncover unexpected areas of innovation.
  5. Create variety and volume in your innovation options.

3. Implementation 

Innovation is not just about generating the next big idea—What’s more important, is how you implement the ideas that make it out of the gate, and how you then build a culture that will help sustain the creation of those ideas. 

There are generally a few moments within the history of a company when the need for innovation becomes crystal clear. It may be because of lack of revenue growth, a competitor launching a  new product, a succession of lost bids or many other reasons.

Whatever the tipping-point may be, the most important step towards creating a sustained culture of innovation is to build the organisational capability for implementation. 

Innovation Implementation involves 5 key components.

A. Building consensus

The first reason why innovation implementation seems like a daunting process is largely due to people-related issues. For people to accept new ideas, they require patience as well as a structure to guide them.

As you launch a new innovation, ensure that you tell your story to all your stakeholders, especially those who will directly benefit from your innovation as well as those whose resource backing you need. It’s also important to tailor your approach based on what’s important to each person and what you need from them.

If you fail to build consensus, you will face resistance in making an innovative culture stick. Resistance may come about because some people feel that the innovation may render them redundant or it might drastically change the status quo. Whatever the reason, whenever your team feels insecure, whether that insecurity is justified or not, they are more prone to resist. The resistance may take different forms, from covert subterfuge to open dissent; but in any form, it poses a threat to innovation implementation.

To counter this resistance, you need to first acknowledge its existence. Second is to seek to understand why. Lastly, especially since it can be hard to combat the resistance, the best approach is by reinforcing a culture that accepts, and even encourages, risk and disruption. 

B. Reinforcing the idea 

The best way to guide an organisation’s everyday decisions is through a brand mantra; that is an actionable statement of intent, such as: “Inspire Innovation”; “Create 2 new Innovations a year”; “Be relentless”.

A brand mantra is not just a slogan. It is an organisation’s primary positioning and their stake-in-the-ground message. Although seemingly simple, it’s a powerful phrase, saying or affirmative statement that is used to set our intentions and motivate our inner being. It is the bedrock of how a company scales, what an organisation takes pride in and an indicator of a particular brand’s trajectory. 

Many organizations use brand mantras to cultivate their message and define a brand both internally and externally. If you use yours correctly, you can reinforce the innovative idea you are championing in your industry and get your people to support you as well .

C. Creating a structured, repeatable process

Ideate, align, repeat. When teams collaborate in developing new innovations, having the right mix of ideas and processes will ensure that its marketability happens relatively quickly with enhanced productivity across the board. According to Soren Kaplan, author of ‘The Invisible Advantage: How to Create a Culture of Innovation’, “The most innovative companies today understand that their competitive differentiation comes as much from their innovation process as it does from what they’re innovating.”

As you experiment, ensure you are modest in scope, especially when you are starting out. You might begin with simple drawings of the new product or “paper prototypes,” or a demo that your end users can interact with to evaluate what works and what doesn’t. Such experiments are quick and inexpensive, and they help you figure out early enough what you need to tweak for your concept to deliver better value. With each round of testing, progressively move to more complex experiments involving more users until you get to your end product..

To get the desired results in innovation, a structured, repeatable process is vital from start to finish.

D. Build in accountability

Innovation is mostly associated with creativity, experimentation and creating positive change. On the other hand, when you think about accountability, what mostly pops up is responsibility. This can at times have unfair connotations of liability or even guilt where failure is involved. Therefore,  it may seem strange to suggest that one should be used to support the other. 

However, this exact combination can help mediate the barriers and complexities present in the innovation process. Innovation needs creativity to kick start it but it also needs a robust structure to work. Accountability provides the necessary framework within which ideas can thrive and be implemented successfully.

Accountability is about accepting responsibility for both successes and failures. More importantly, it is not about creating a blame culture where failure is seen as a liability deserving punishment; conversely, it’s about learning and empowerment. 

This should also be at all levels of the organisation. By pushing decision-making and accountability to a lower level, a company will motivate its staff, encourage collaboration and therefore clear the way for greater innovation output.

E. Learn from your innovation efforts.

I bet you’ve heard the mantra “fail fast, learn fast”. Google uses the phrase “fail well” while Pixar encourages its employees to “be wrong as fast as we can”. At our firm, we like to think of it as, “fail fast and fail cheap”.  

Taking innovation risks often results in failure, so it’s important to ensure that failure is seen and experienced as a “Learning Experience”.

After each innovation is launched, carefully go through what went well and what did not, listing what you would do again and what you wouldn’t. Don’t overthink failure; the key is learn from it and apply those lessons in your next innovation project.

4. Value creation

Innovation is only relevant if your new ideas are creating value. Organizations must therefore implement ideas and programs identified as the most effective in delivering value to stakeholders.

The failure rate of many well-established organizations has skyrocketed during recent years. However, there are companies that are still experiencing enormous success despite the economic downturn. These companies are thriving because they continuously and effectively deliver products that are valued by consumers.

The main purpose of innovation is to create value. This can be defined in many ways, such as the creation of entirely new services and services,  incremental improvements to existing products, or reducing the cost. Companies need to create value because their ability to compete, survive and grow in a rapidly changing market all depend on whether they innovate effectively.

To do so, many companies have developed joint ventures, experimentation brands or co-brands. This gives them the freedom to test their new ideas and create value without risking damage to their already established brand. 

Nintendo, the popular computer game, offers a good example of value creation through innovation, during its launch of the Nintendo Wii.

The Nintendo Wii came into market in November of 2006 and combined low cost and better features which increased its appeal to customers. Nintendo got rid of excessive features found in the typical game station such as DVD function and the hard disk with the aim of creating the product for less hence selling at lower costs.

This helped the company to use the money brought by the difference in cost to offer a wider range of new features in the Nintendo Wii that the gaming world hadn’t experienced before. By pursuing Innovation, Nintendo created value and distinguished themselves from their competition, the likes of  XBox or PlayStation. 

It also led to Nintendo being able to create a new market of gamers. The Nintendo Wii, with its affordable prices and innovative features, appealed to an entirely new customer base and attracted even the non-gaming demographics which included the kids’ parents and the elderly as well.

Cirque du Soleil is another good example of value creation through innovation. At its peak the company employed over 5,000 people from over 50 countries and generated an annual revenue of more than 1.5 billion US dollars. Here’s how they managed to do so.

They first got rid of animal acts and then invested the money and time in the storylines and theatrics essentially turning themselves into a production company rather than a travelling theatre as was the industry norm. This became a massive hit and their audiences came back for more shows bringing their friends along to witness and enjoy the spectacular display.

With the newly acquired customer base, willing to pay even higher prices as they cheered on the extraordinary spectacles, Cirque du Soleil ended up becoming the giant they’re today. 

Innovations don’t have to be game-changing or splashy to lead to sustained organisational growth and success. Most times, it’s the small but mighty initiatives, rarely from the top management or an “idea lab,” but rather from frontline leaders and individual contributors closest to the customer and in the best position to understand their needs, that help companies pivot to successful paths.