Think of the word ‘innovation’ like a giant bunch of balloons. What do you picture? What I see more and more these days is a hand holding a limp collection of ribbons, the air gone out, the brightly coloured sacks flopped along the ground.
Innovation has been the word and idea for so long. Wired called it an “overused buzzword” in 2013. And yet it persists, and we rely on and fixate on it. Many companies now have specific teams dedicated to innovation, often headed up by a chief innovation officer responsible for researching emerging trends, unleashing creative thinking across the team and allocating resources to drive topline revenue growth. So why has all this effort translated into underwhelming results for some companies?
Why has all this innovation effort translated into underwhelming results for some companies?
Often, the mandate to innovate has very little impact on the broader organisation. It’s put in place by an executive team that has landed on innovation as The Thing but hasn’t looked beyond the buzzword to understand what’s required to make it a success — the air that needs to go into those balloons.
This siloed approach is a problem I see time and again. Whether a company was created 100 years ago or just last year, transformation and innovation should be at the core of everything it does. It has roots in every part of the company, not just within a single team, and its impact should be felt right across the organisation.
Innovation can be a powerful route to competitive advantage, but not if we assume that simply having an innovation team in our company is the fix-all. To get to the bottom of it, we need to take a step back and unpick what innovation really means today.
Transformation is innovation
In the past, we’ve referred to transformation and innovation as two different things. Transformation was understood to be the process of bringing pre-internet era businesses into the modern age, embracing new technology to streamline operations and further growth. We typically saw innovation separately, a driver to develop the next big thing alongside the relentless pursuit of putting the customer first.
Increasingly, I'm finding it harder to separate those two concepts. Transformation is about getting you to a place where you can innovate. Innovation is about getting you to new value and the next thing. But both are about being in a position to continually iterate. In both cases, it’s about developing the mindsets, behaviours and practices that allow you to anticipate and discover what tomorrow’s needs will be. It’s about creating and testing scenarios and concepts to help you know where to invest. And it’s about staying relevant — evolving your organisation and your offering to continue serving your customer’s changing needs.
So, if innovation and transformation are ultimately shooting for the same goal (being well-positioned to create new value), then really it makes no sense to separate them from business as usual; how would a business stay competitive if it wasn’t doing this?
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Too much action, not enough thought
When a company is facing threats from all directions and their industry is changing fast, it can be tempting to jump straight into new innovation projects and investments. There’s no time to lose, right?
But all too often going in all guns blazing without having identified why you’re seeking to make a change is where I see businesses trip up, and where money is often wasted. You need to be sure of the purpose behind the change you’re setting out to make if your efforts are to align with your wider strategy.
The most effective leaders ask the right questions rather than offer up the ‘right’ answers.
A good example of this shift in mindset comes from a conversation I had with an executive at a leading airline right at the early stages of the pandemic last year, when people were still in disbelief about what was about to hit us. Instead of asking what I always hear from travel companies looking to innovate — 'how many more seats can we sell?' — I heard 'how do we use this moment to reshape the world, and communicate a sense of inclusive hospitality?'
This allowed them to push beyond simply considering new features and rethink their entire proposition including their employee experience—living their ambition instead of just producing it.
If you automatically know the answer, or assume you do, it’s not innovation.
I’ve come across all kinds of leaders in my time, but the most effective are the ones who ask the right questions rather than offer up the ‘right’ answers. What is the spirit that is uniquely your company’s? What is the way in which you will be prepared to continually win? If you automatically know the answer, or assume you do, it’s not innovation. Ask those questions from a perspective that includes the people you are trying to serve. The empathy created in these moments gets you to an answer that isn’t standardised, and can’t be predicted by data and analytics only.
The leaders that are really moving the needle aren’t doing so from the front of the room. They’re not the stereotypical leaders performing within a theatre of innovation. They ask and then listen, they’re data driven, they’re often introverted, and they focus much more on ‘we’ than ‘I’.
Innovation is a people problem
Most companies frame challenges based on what they want to achieve and the business goals they have in mind. But it’s a mistake to impose your company's needs on the market or to assume that you’ll meet your customers’ needs by default because you already know them.
Innovation comes from listening to internal and external signals and being truly people-centric more than business-centric. It’s not about starting with grand, creative ideas that your team loves and that you all assume the world will love, too.
It is amazing how often companies — even ones that think they are listening to their customers — can get this wrong.
Take yourself out of the picture and look for what customers actually want.
A few years ago I worked with a B2B2C media company that has incredible amounts of data from its customers and a regular practice of surveying them. They launched a new offer that fit neatly into their portfolio and made the most of an asset they’d acquired.
The problem was they had already decided how they wanted to use this asset and even when they looked at customer feedback, they interpreted it through this lens. They eventually — after spending a lot of money and resources on this endeavour — became frustrated that uptake was slow and repeat usage far below expectations. It was only bringing in some outside tough love that helped them realise that their process had started with a use case they weren’t willing to let go of, one that benefited the organisation more than the needs of their customers. They’re now looking at how to use this new asset through the right lens.
Success only comes from meeting real needs and desires that exist outside your organisation. Take yourself out of the picture, look beyond what you think innovation should be — all shiny and clever and designed — and look for what customers actually want.
Chances are, it might not be a beautiful new product that your company can nominate for a bunch of industry awards. It could be a more subtle change to your business model, a new touchpoint, or a new and more sustainable way to deliver your offer.
Moving beyond the buzzword
If you’re reading this thinking ‘How do I do this right?’, you won’t be the only one. Here are a few things I encourage you to think about if you want to harness the true power of innovation:
- Always start with the why. A lack of contextual thinking and foresight is why so many innovation teams and investments fail.
- People first, thing second. Too often that mentality gets flipped. Success comes from marrying the needs of your business with the needs of the market.
- Make it an ethos, not a department. Innovation is not a one-time project or an effort that can be outsourced to a single, siloed team. It is constant transformation and requires a distributed approach with input from every person in your organisation.
- Lead from within, not from the front. The old industry jokes are there for a reason. Real innovation comes from a culture of learning, creativity, flexibility and resilience that is most effectively led by listeners, not by performers.
- Focus on practising innovation rather than doing innovation. Worry less about implementing processes (think innovation jams and hackathons) and more on the different ways you’re enabling change and growth to cultivate a mindset based on iteration and putting the customer first.
If you take anything away from this, it’s to think about filling those balloons. Innovation will only excite and drive your workforce when it’s visible, supported, prominent and has some life to it.