With the latest PMI surveys signaling a sustained recovery it is time to start thinking about how the business world of the future will differ from that of the pre-depression era. Will it be the same old mix of process and procedures and instant profit before all or will its leaders have learnt a vital lesson from those who sacrificed their businesses on the bonfire of world recession.
If the 2012 Accenture survey is anything to go by then there is cause for hope. 93% of companies acknowledged that their long-term success is dependent on their ability to innovate. Increasingly innovation is seen as the differentiator, the key to 21st Century competitive advantage and growth and the top leadership challenge of the post-recession era. But sadly, there are still those out there who have yet to grasp the importance of innovation and the way in which it can drive product, perception and profit in an era in which all organisations effectively work from the same technology base.
Whilst there is still some way to go, even the UK Government is generally getting behind the idea of innovation as a differentiator. Admittedly the NHS seems to be off to one side on this, having recently cut their innovation fund claiming, “innovation isn’t a core part of what we do.” But whilst the NHS seems to dismiss developing new ways to care for people and save lives as not a core requirement, by contrast the Technology Strategy Board aims to “accelerate economic growth by stimulating and supporting business-led innovation.” Under the banner of “why innovate” the board’s website highlights the fact that “Innovative businesses are more productive and typically grow twice as fast as businesses that fail to innovate, and innovative economies are more competitive, respond better to change, and see higher returns on investment and increased living standards.”
One of the challenges facing those of us who are trying to publicise the innovation message is that for decades innovation simply meant the launch of a new product or bit of technology. But successfully driving growth through innovation is no longer as simple as launching new products, it’s about building the right mix of Insight, Collaboration and Agility in order to create powerful ideas and deliver differentiated experiences at a competitive pace. Innovation is the red thread that runs through each of these three competencies, binding the key ingredients together and transforming organisations from followers to innovation leaders, becoming one of what I call the ‘Next Generation Organisations’ and taking their rightful place in the new world order.
Without insight, collaboration and agility, businesses, which are seemingly known for their innovative abilities, will follow the path taken by Blockbuster, Kodak and others, which simply did not foresee and adapt to changing patterns of buyer behaviour.
Some of the work, which I have been doing, recently involves working with clients to increase the organisational and strategic focus on these three key elements by binding them together with the red thread of innovation:
An increased focus on…
Insight and new approaches to gathering it from customers/consumers and markets and how organisations use it to create opportunities.
An increased focus on…
Collaboration with customers/consumers and how organisations use it to build connections and design differentiated solutions and experiences.
An increased focus on…
Agility and how organisations use it to adapt and change direction and pace in the face of uncertainty and complexity in an effort to become competitively unpredictable.
However, one final point. The innovation mix, creating a next generation organisation is not simply the preserve of business. Interestingly when the Parliamentary Security and Intelligence Committee recently quizzed the joint heads of the intelligence services the same themes emerged. We heard how the services put a premium on agility, flexibility and capability and innovation to enable them to meet threats as they occur.
The reality for most organisations that muse about ‘building a culture of innovation’ is that it takes significant change and most organisations are not built for change. What allows organisations of any scale to ‘manage today’ doesn’t allow them to ‘manage tomorrow or the future’ and it’s this challenge that leaders face when working towards securing innovation capability.
