“I think frugality drives innovation, just like other constraints do. One of the only ways to get out of a tight box is to invent your way out.”
Making innovation real is about more than focusing on the latest technological and business trends. Strategising to incorporate robotics, artificial intelligence (AI), data driven connectivity and the Internet of Things into your corporate strategy will not make your business grow. Building, and managing for a capability of continuous, repeatable innovation might.
Innovation goes beyond being aware of the impact of the Fourth – or even the 5th Industrial Revolution. It contemplates the world we work in without borders and it does not confine itself to traditional business models, or the conventional business strategies and methodologies that we have grown so accustomed to.
If anything, the recent COVID-19 pandemic put things into perspective. While the world is still coming to grips with its far-reaching consequences, waging a war on the silent, deadly enemy – no one can deny the effect it will have on how we think about work, collaboration, growth and the way we interact with the environment around us.
In the same manner, times of unprecedented change bring to the fore the role of effective innovation management, and it asks hard questions on how we plan to lead and imagine the future.
Frugality drives innovation
As Jeff Bezos neatly points out, frugality drives innovation. The only way to get out of a tight spot – more often than not – is inventing your way out of there. Making innovation happen in the organisation has never been easy, or even steadfast in its promise of growth and success. In a fast paced VUCA (Volatile, Uncertain, Complex and Ambiguous) world it is however becoming an essential capability for organisations.
Fact is, organisations that do not effectively build an innovation capability, pay a price for not doing so. Doing nothing can be very expensive. If investment in innovation activity is low, expect returns to be as well. If building innovation capability in times of unpredictable, sometimes downright scary change is not a core focus, expect to be wiped aside next time a global crises, disruptive start-up or black swan event strikes. Like the COVID-19 enemy quietly lying in ambush, irrelevance does not ask questions about who you are, your cash flow status, your organisation’s age, or even the social standing or respectability of your leaders. It just strikes. Ruthlessly.
So what then are the business and technology trends we expect to shape our future world, and how can we get a better grip on systematically managing innovation in our organisations?
Innovation management is not about new bling, it is about people
We can talk technology, blockchain and cybercurrencies, neurotechnology and gene-editing advancement, or focus our efforts on driverless cars and living on Mars. The world is changing at a phenomenal pace. According to Gartner a 100 million consumers will shop in augmented reality by the end of this year and by 2021, over 1 billion people worldwide will regularly use an AR/VR platforms to access apps, content, and data says IDC Research. But progress and the face of the future does not get shaped by technology alone, as we know – it is mostly about people, and it is here that our innovation management approaches fall appallingly short.
In the hype of the shiny and new, it is easy to overlook the people component to being successful at innovation, and that could be a fatal mistake. According to the World Economic Forum, emotional intelligence, creativity, and people management skills are three of the top 10 essential attributes a leader will need to possess in the organisation of the future. This then begs the question, how are you addressing skills development to equip your organisation for leading in the future, and how are you exposing your people to what is happening in your industry, so that they can think about innovations that would be relevant and strategically forward looking enough to get you there?
It is about non-technical innovation, global systems and environmental sustainability
Recent research by Huber and Hecker reinforces a view on the fundamental dimensions of the importance of non-technological innovation, innovation dynamics and global systems of innovation. They also believe that the substantive trends to shape the way we manage innovation are managing innovation for environmental sustainability and digital innovation.
The importance of non-technological innovation
The narrow populist view that innovation mainly refers to technological innovation or new products and production processes is outdated. We know that it is also applicable to services, and that it applies equally to a firm’s organisational structures, administrative processes and managerial practices. It is however the latter, that we see not receiving enough attention, strategic intent or resources.
For the future of innovation management, the following key issues, according to Huber and Hecker, are of the utmost importance:
- Investigating the drivers of non-technological innovation;
- Determining interdependencies between factors and processes leading to innovation and how it is supported by various innovation types;
- Determining the impact of organisational innovation on firm performance.
Innovation Dynamics: Innovation is not a standalone activity
Innovation is a dynamic phenomenon. Projects cannot be managed or analysed in isolation but must be understood from the context of other activities and objectives. It points to a systems approach to make innovation work better. The organisation must also integrate the interdependencies of innovation success with the design of an environment that supports long-term impact on the organisation’s innovation performance. In recent times this includes an acceleration of thinking about the future of work and changing location model that can be at home, at the office or possibly a hybrid of the two.
Global systems of Innovation: It is about networks
The external environment matters. Local, regional and national environments are important but it is how we engage with the global environment that is vital. As the COVID-19 pandemic reminded us, we are all connected.
Global networks and global innovation systems are imperative for growth and learning, but exactly how to effectively engage, establish and maintain global networks remains a challenge for organisations today. Organisations that get this right will not only be leading change, but will see the greatest impact on their bottom lines.
According to Huber and Hecker, facilitating the establishment and maintenance of targeted international networks will be a critical factor for successful innovation for individual firms, as well as for innovation policy makers in the future.
Managing innovation for environmental sustainability
Environmental challenges such as climate change, environmental pollution or water shortage ironically involve an attractive side effect for business: they will generate considerable demand for new products, services and other kinds of innovation which helps to address these issues. In addition to intelligent public policies and an entrepreneurial state (Mazzucato, 2013), there is an important role for the private sector to develop innovative solutions which help addressing the environmental problems we face today.
This is important for firm competitiveness, not only because of the environmental challenges and related tightening of environmental regulations, but also because of the increasing transparency of environmental impact and expected responsible behaviour in this regard. This aspect in all likelihood will be even more pronounced post COVID-19, with increased awareness about the destructive impact of our own actions on the environment.
Looking after our surroundings is not only the right thing to do, it will present an opportunity for helping customers to address a real need. A combination that according to Huber and Hecker, leaves considerable scope for financially successful business models.
A new Innovation Management Systems Standard
One can also not speak about successful innovation management without referring to it in the context of an interrelated system, and with particular reference to the ongoing work by ISO (International Organisation for Standardisation) concerning the ISO 56000 series of Innovation Management standards.
The new standards on innovation management, assist with capability development for organisations in innovation. More about this in a later piece.
This article is an excerpt from Innocentrix’s Innovation League Report. To download the full report and for additional information on the Innovation League click here.