The drive for ‘growth in value’ for customers and optimizing their experience remains to be a top agenda item for business leaders to protect and grow earnings. Decentralized, entrepreneurial working that embraces digitization is a mega-trend that organizations are using to invigorate and reconfigure themselves to combat fierce competition and unpredictable disruptions.
However, legacies and conventional habits often reinforce bureaucracy and silo operations that slow down the agility of organizations to respond decisively to new opportunities. From our work in both the private and public sectors, we have identified ten interconnected elements (Figure 1 above: The Innovation Compass) that allow an organization to connect its strategic innovation drive to its functional levels, thus ensuring a higher probability of sustainable improvement and growth in value.
Active leadership for innovation has to be the centre point that sets the direction of travel, unpacks complexities and demonstrates a real commitment and ambition. Leadership defines the cultural ethos of an organization - determining its entrepreneurial drive at all levels and sensitising the urge to respond to change speedily and constructively.
Responsiveness and constant invigoration of the business model requires a level of cultural adaptiveness to be built into the organization. This adaptiveness can be fostered through exposure to approaches and practices that are often the preserve of start-ups. A sense of openness and inquisitiveness that pushes the boundaries of imagination to experiment outside of the confines of usual business norms. Cultural adaptiveness however, is not a state that happens naturally. Conditions need to be nurtured. Skills and competencies form the foundation for creating cultural adaptiveness, and the right combination need to be identified and aligned to support innovation development.
Building a capability in innovation demands a commitment to change. Essential to this, is a clarity of the ecosystem in which the business operates in. Very often organizations are closeted within their own close-knit sectors. A better understanding of the ecosystem that governs business relationships and operations, will result in a more far reaching Body of Knowledge (BoK) that determines not only areas where innovation could happen, but also identifies efficiencies and enables better alignment of tools and processes. The newly formed BoK becomes the stimulus for delivering the magic in customer/user experience. Organizational ecosystems are determinants of dynamically changing markets conditions, and therefore to ensure a consistently sustainable pipeline of innovations, organizations need to review their ecosystems regularly.
In organizations often innovation is seen as an adjunct activity. Something happening by a small, smart group of people somewhere, but the real focus is on business as usual and bottom line tactical improvements. Innovation as an add-on will not deliver the significant results purported or anticipated. Designing innovation into an organization requires assessment of existing capabilities and technologies to optimize organizational readiness and introduce innovation interventions where benefit and value can be maximised.
Throughout the innovation journey, from inception through to transformational maturity, the ‘story’ or ‘narrative’ of innovation, needs to be communicated. It is vital that this message be delivered in bite-sized chunks. It is important to avoid passive and unidirectional communications that will only reinforce standard corporate doctrines. Designing the innovation communication message must exhibit a degree of interactivity – creating a sense of ownership and engagement with recipients. Our experience has shown that this form of communication creates the necessary buzz that embeds innovation within an organization’s natural rhythm.
Departments with the responsibility for tracking trends and delivering insights for an organization are strategically important and they use an array of tools and processes. However, Cultural Adaptiveness expects an organization to reconfigure its systems, processes and roles speedily to respond to the newly acquired Body of Knowledge. These dynamics supplement an organization’s agility and resilience and provide useful prompts for evaluating the health of an organization’s innovation portfolio.
Organizations are defined by their personalities. An Organizational Personality is the pattern of decisions, interactions, behaviors and adjustments an organization exhibits. It influences nearly every aspect of a business, the choices it makes and how its ecosystem emerges and changes. Today, Organizational Personalities are more recognised digitally through different channels and points of interactions. Social media and the internet provide a multi-dimensional presence that affects reputations positively or negatively. Defining the Digital Personality will have to be a leadership act. A corporate digital personality should be configured to deliver different but connected customer / user experiences through the different channels, and underpin innovation communications.
The Innovation Compass approach can also be used in M&A activities, effectively creating new growth processes beyond just optimizing the strategic deal value. In addition, the Innovation Compass could act as a useful instrument for delivering cost reductions and operational efficiencies.