Innovation is one of the most popular words being used in businesses today. As Alex Triantis, dean of the University of Maryland's Smith School of Business, remarked during his keynote at the school's recent annual summit, "Innovation is an essential building block for prosperity and survival."
While he pointed out the importance of innovation for a company's future, he also noted that turning new ideas into financial success is not easy. There are many impediments, such as corporate strategy, culture, organisational processes and misaligned incentives.
Indeed, John Kotter, a professor at Harvard Business School and well-known author on change, notes that at least 70 per cent of new efforts fail.
So how can you improve the odds your innovation will be a success?
- Have a clear role for senior leaders
For anything to be truly successful in a company, there must be top management support. Being able to get buy-in from the board and senior management is vital for the successful creation and delivery of innovative products and services. A recent Fortune magazine article on the World's 50 Greatest Leaders pointed to how Alan Mulally, as the chief executive of Ford, saved the automaker by changing its "risk-averse, reality-denying, CYA-based culture."
Similarly, retired Army General George W. Casey Jr. noted that leaders have to be able to "see around corners" and see something significant about the future that others don't see. This is critical as environments are increasingly described as volatile, uncertain, complex and ambiguous.
Joe Taylor, chief executive of Panasonic, describes innovation as being able to adapt to the markets needs and demands. The market has changed profoundly from the industrial revolution to now. "How quickly can you can adapt?" is how he defines innovation. Top leaders have to be champions of innovation by what they say and what they do.
- Take risks and allow for failure
Innovation only happens in the right culture, one where everyone is encouraged to speak up and bring new ideas to the table. While this sounds like common sense, few companies can say that they routinely do this.
Companies also have to take some risks in order to innovate and to succeed. Employees have to see the need for change - either to move the business forward or to help it avoid being left behind. Further, they have to understand that some failures will be likely to occur and that it will be okay. The idea is not to encourage failure, but to foster innovation that leads to winning success as rapidly as possible.
- Start small
Companies may want to have large, breakthrough innovations, but they can still focus on innovating in smaller, shorter bursts. They can look for improvements to current products and services and use smaller experiments to test new ideas. By starting smaller, they may have an easier time getting employees on board and convincing external clients of what they are doing. These smaller innovations can also serve as the building blocks for later larger innovations.
