It stands to reason if we don’t innovate we’ll lose position because our competitors will take over our market share, writes Michael Stanleigh and Ian Huntly, CEO of Rifle-Shot Performance Holdings, official representatives of SoftExpert in South Africa .
In corporations we’ll lose customers and profits and in government we’ll spend more money yet meet the needs of fewer citizens. In health care we’ll lose the ability to stay ahead of the latest approaches to patient care and compromise their health.
Many organisations 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 alone 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 today and in the future. We need to re-imagine our offerings from the eyes of a changing market, and make a step change.
Most innovations don’t even make it to market. But that doesn’t mean organisations shouldn’t continue to strive for continuous improvement, but this it is not enough. Innovation is the essence – the heart of organisations’ survival and growth. Without it they’ll struggle and die. The great organisations today are known for the innovations that are successful.
If invention is inspiration, then innovation is discipline. The world is filled with inspiration, as evidenced by the more than 30 000 new consumer products introduced into the marketplace every year. But the failure of 90% of them is a powerful reminder of just how much discipline and planning is required to achieve true innovation. If we focus on this statistic, we’ll resist spending the time required to create new products, services and processes. Most of these organisations that released new products that failed, lacked a clearly defined innovation process.
Today, organisations need strong, committed leaders to create an environment that supports innovation and drives it forward. Such leaders will accept risk and spend time to overcome resistance. Organisations that focus on short-term, bottom-line oriented thinking create pressures on management and staff that diminish the focus on the long-term innovation process.
Research studies point to a risk-aversive corporate culture as the number one killer of innovation. They show that short-term goals, particularly quarterly numbers, create an environment where the longer-term actions necessary to drive innovation are squashed. As a result, employees tend to avoid innovations that require longer-term thinking. Rather, they focus their attention to develop improvements around ideas that help to meet the shorter term results management is seeking. This leads to an increased focus on sustaining existing products and services rather than creating new ones.
To protect prospective innovative concepts, innovation teams need to be aware of these typical questions posed by management and be prepared to respond.
* What is the expected return on investment? It should be no surprise that management will want to know this information; but it’s probably too early for the innovation team to provide an answer. Therefore get agreement from management to specific dates to get back to them with this information; once you’ve reviewed the prospective idea more thoroughly.
* Are you meeting your milestones? The innovation team must be willing to plan, propose and get management agreement to milestones for idea exploration and development. When setting milestones, the team will need to consider what they require for research and development of the concept and prototyping. Once these milestones are set, they should also be willing to be accountable for meeting them in full. This will avoid management from setting imposed milestones that may compromise the innovation project.
* Do you have a definitive business case with quantitative data? While it’s probably too early for quantitative data, it is possible to provide management with a qualitative assessment of the innovation concept. Innovation teams should include this information in the Innovation Scope Document.
As many organisations become successful they tend to innovate less. Unfortunately, they begin to fear that the money, time and resources they spend on innovation will erode their success, rather than enhance it. They lack that sense of urgency to continue moving forward and so they mistakenly try to maintain the status quo. However, this is a very short-sighted approach.
There’s something to be said about applying a sense of urgency to innovation and applying it consistently even when successful. According to Google chairman, Eric Schmidt, “If you don’t try, you don’t know. We tried. We don’t even remember the names of the products that failed. That’s the secret of innovation.”