Constant innovation is the only way to survive in this digital age. Enhancing the organisation’s innovative capacity is therefore one of the CEO’s core activities. How do you create a fertile ground for innovation?
What is innovation?
When thinking of innovation, many people will think of inventions like a new gadget, machine or technology. But innovation also includes renewing services and processes. This could include a more efficient way of monitoring the growth of crops using drones, or a new production process in which repetitive manual tasks are taken over by robots with artificial intelligence.
5 tips to increase your company’s innovative power:
- Focus on a specific form of innovation
Choose a form of innovation that fits your organisation. The Boston Consultancy Group (BCG) has studied the top 100 most innovative enterprises worldwide. Based on this research, the research bureau identifies six different innovation models:
Creator – major, costly innovations that cause market disruption
Solution builder – client-focused innovation, perfecting the customer experience
Leverager – continuous improvement of a superior business model
Expander – applying expertise in new way in other markets
Defender – responding to market disrupts by collaborations and acquisitions
Fast follower – quickly responding to competitors’ innovation
According to the BCG, it is important to pursue an innovation model that suits your sector’s conditions. It is for instance risky for a retailer to use the Defender model by relying on a brand’s strength and the existing network of physical stores. This model resulted in the Kijkshop company being overtaken on all sides by online competitors.
Also take a good look at the competition. Which innovation models are used by peers, and how effective is this? Which models are not yet applied by competitors, and for what reasons? Perhaps your organisation can help fill this gap.
- Ensure a flat, diverse organisation
Hierarchic relationships may restrain innovation. A flat organisational structure ensures that all employees feel involved in the organisation’s course. Moreover, great ideas often emerge on the work floor, and not just in the boardroom.
As a CEO, your door should always be open and you should listen to everyone. You should also demand the same mentality from other managers. Surround yourself with people from different backgrounds, too. Research demonstrates that an organisation with a diverse management generates a higher turnover from new products and services. Diversity in nationality and gender should be present in every layer of the organisation.
- Commit to long-term
There is no quick fix for innovation. The reality is that most major innovations take time. Alexander Fleming may already have discovered penicillin in 1928, it only became available on the market some twenty years later. The technologies behind quantum computers have already been in development for decades. These extreme examples illustrate the long-term commitment required from a CEO for true innovation.
An inspiring example is Bernard Charlès, Dassault Systèmes’ CEO. He joined the enterprise in 1983, two years after it was founded. He has been the company’s CEO since 1995. Charlès strongly emphasises creating a corporate culture in which innovation takes place constantly. Under his guidance, Dassault Systèmes has grown into one of the most innovative and sustainable companies worldwide.
- Benefit with technologies and tools
Your organisation’s innovative power will not be triggered by sporadic brainstorm sessions with a very select group of employees. It is more effective to create room for innovation in daily practice. Employees could, for instance, spend some of their time working on projects that will in their opinion benefit the company most, which is a well-known rule at Google.
Targeted innovation sessions can certainly be useful. You could use an innovation technology such as design thinking, a method in which you look for the best possible solution for a specific issue. Technology can also make a powerful contribution. There are all kinds of platforms that stimulate interaction and collaboration.
- Dare to make mistakes
An idea might look wonderful on the drawing board, but there is always the possibility of a lack of envisaged results. An estimated 40 percent of new products ultimately fails. So it is a good thing to be critical of the feasibility of innovation projects. There is however the catch of promising projects being stifled as well.
Innovation is all about trying new things, which do not always work out well. Nevertheless, a failed attempt to innovate can be exceptionally instructive. You may gain new insights into customers’ preferences, or strengths of existing processes. So don’t be afraid to make mistakes, as long as you learn from them. Also allow your employees time to experiment, and don’t judge them harshly on failures.