Building Innovation Into Organizational Capabilities

Innovation is a matter of survival at the medium or long term for the majority of organizations. They need innovation to ensure they keep or improve their position in the marketplace. However, individual acts of innovation are not enough to achieve the sustainable long term competiveness and success. Innovation is a collaborative effort.

What is Innovation?

For many of us, innovation means the introduction of new technology and inventions—such as the internet, cell phone, etc. It is true that innovation led to the development of these new products but innovation is much more than just the introduction of new technologies.
When most people are asked to identify the greatest innovations of all time they usually identify the: light bulb, electricity, the phone, the car, the computer, the iPod, the cell phone, the internet, or such. That is, most of us usually focus on more current technology when responding to this question. But what criteria did we use to identify these as great innovations? Was it determined because it was of benefit to us individually, or to: the global population; the bottom-line of an organization; the customers served by the innovation; or to the environment?

Innovation is about new products, services, processes or structures. It is about identifying new approaches and thinking to do what we have always been doing. It is about creating new approaches and thinking on how we do what we have always done.

Key Drivers of Innovation

The most important key driver for innovation today is when 75% of the leadership is honestly convinced that business as usual is no longer acceptable.

Most organizations are there right now. But they fail because they don’t think about how to develop the organizational culture to nurture innovation and how to implement a process for innovation. And they don’t try to find out how other innovative organizations do it. They only see how others in their own industry are working on innovation and these organizations may not be doing it well, yet they adopt a similar mantra. This is not innovation. It is only an idea. The trick is for organizations to actually build innovation into their organizational capabilities.

Why Build Innovation Into Our Organizations?

When Steve Jobs left Apple in 1985 (only to return 12 years later when it floundered), he said the company mistakenly prioritized “profits over products.”

Unlike small companies, big companies have to “protect their turf;” they have shareholders to account to and quarterly numbers to hit in order to protect shareholder value. Things also happen more slowly in larger organizations. They establish elaborate processes and tend to make decisions only by committee. So they opt to extract value from existing products instead of creating new ones. Mistakably this kills innovation.

So while many organizations reach for it, they often don’t really know what it is and how to attain in, so they fail. All for the same reasons – no time spent building a vision for innovation , the innovation strategy and the culture and process for innovation.

Roger Martin, dean of University of Toronto’s Rotman School of Management and Richard Florida, urban thinker recently said: “Our future depends on nurturing creativity and intelligence rather than protecting the past. The transition to an economy based on brainpower rather than physical labour is already under way. Our time is seeing the rise of a whole new economic system that is based more on brain than brawn, more on ideas than capital, more on human creativity than natural resources and brute strength.”

Many organizations today know that they must become more innovative in order to survive and grow. No longer can we look to the past to predict the future. No longer can we improve our products and services and expect this to be true innovation. We must re-think and re-invent what it is that we are doing and want to do. We need to identify what our products and services will be in order to manage in the future economy.

In 1900 there were approximately 100 million people in the United States. 30 million of these worked on farms. In 2000 there were approximately 300 million people in the United States. Only 5 million worked on farms. Industry displacement has been going on for over a century.

If we apply these wise words of Peter Drucker: “There is nothing as useless as doing efficiently that which should not be done at all;” then we will understand that we should not hold onto the past. We must honour it but move on. In our organizations we must stop doing that which is not driving the organization forward and that which is not meeting all of our customer’s expectations.

Key Areas of Innovation Management

A recent study by the Cranfield School of Management and Export-akademie Baden-Wurttembert in Germany identified five key areas of innovation management. These will increase the likelihood of success in your innovation strategy and in the creation of a culture which supports innovation;

  1. Innovation strategy – which includes how innovation links to the overall strategic imperatives of the organization. This will clarify what the performance requirements for new service; product or process innovations need to be.
  2. Creativity and ideas management – understanding the customer needs and translating these into new products, services and processes. This will require engaging all employees in the development of new innovations.
  3. Process management – innovation is a process and there needs to be a clear process for taking ideas and moving them from vision to reality.
  4. Project management – great innovations often fail because they don’t focus on how to quickly implement the innovations. It is through project management that corporate goals which might include time-to-market, high product quality and low development costs can be successfully realized.
  5. Human resource management – innovation can never happen without a culture to support it.

The Business of Innovation

Every organization strives for innovation. Organizations that fail to adapt to changes in their business environment face extinction. The essence of innovation is to discover what your organization is uniquely good at, what special capabilities they possess…and taking advantage of these capabilities to build products or deliver services that are better than anyone else’s.
Every organization has unique strengths. Success comes from leveraging those strengths in your own service or product marketplace.

Michael Stanleigh

Michael Stanleigh, CMC, CSP, CSM is the CEO of Business Improvement Architects. He works with leaders and their teams around the world to improve organizational performance by helping them to define their strategic direction, increase leadership performance, create cultures that drive innovation and improve project and quality management. Michael’s experience spans public and private sector organizations in over 20 different countries. He also delivers presentations to businesses and conferences throughout the world. In addition to his consulting practice and global speaking he has been featured and published in over 500 different magazines and industry publications.

For more information about this article you may contact Michael Stanleigh at