Innovations are countless and all around us. Just look at the evolution of the motor industry for instance. In less than twenty years we have gone from owning a car to different ways of just sharing the asset at our convenience. There is Zipcar, driveMyCar, relayrides, Go get, and many more.
Look at health industry services such as Patients like me, which discloses the medications, therapy, diet and lifestyle information of patients with chronic diseases – for better or worse we’re not quite sure yet – were unthinkable just some years ago.
But why innovate at all? It depends. Maybe your company wants to link into market growth, generate growth, manage growth, or maybe it is losing market share by growing at a slower pace than the market. Whatever challenge a company faces, the overall objective of innovation for the majority of firms is profitable growth.
A challenge for young companies
An astonishing number of young growing companies fail to achieve profitable growth and go bust within ten years. It follows that many of the new, innovative companies around today won’t last. But implementing innovation in the right way can help protect new and old businesses sustain and grow their market share and achieve success.
To achieve profitable growth through innovation many factors come into play. Some of the overarching and most crucial factors to consider include the approach, the context, and recruiting the right talent.
Success through innovation: some key points
Companies should have a portfolio of innovation including incremental and radical innovations. Even though the radical examples stand out in our minds, for most companies the usual route to innovation is incremental, which means a lower degree of risk to achieve the goals set.
1. The Right Approach
The approach to innovation contrasts the rational planning that we are used to in large firms. Managers should take a more experimental approach where the ratio between assumptions and data can be quite different to our present business. We need to build a systematic process to check the implicit assumptions about our innovation, our client’s needs and our management mindset.
We must identify and map key milestones. These help reveal our assumptions, and enable a comprehensive check and balance. The steps involved from the formation of an idea to a marketable product can take quite a while.
2. The Right Context
Having the right context is also essential for innovation. It is illuminating to look at some radical case studies. Take Pentagram for instance, a design firm without a conventional management structure. There is no CEO and no HR department. Just 19 self-regulating equal partners with an equal stake in their company.
3. The Right Talent
Providing the right structure and organizational context is essential for getting the best people and getting the best out of those people. Otherwise both may stagnate. People need to have the right environment to be creative and innovative. They can’t be ordered or even asked to be creative. It needs to flow, and the environment needs to foster that flow, not demand it.
At present, in most innovative companies all kinds of boundaries are being clearly dismantled. New concepts and innovations are being revealed every day. Starting with these action plans can help companies innovate and succeed.