The Evolving need for Innovation
10/Dec/2011
In 2010 the Center for Creative Leadership (CCL®) concluded a comprehensive worldwide leadership study involving hundreds of global business executives. Innovation was at the centrepiece of the research and a summary of the major findings are detailed below:
Five global management trends:
1. The rise of complex challenges
2. The Innovation revolution
3. The art of virtual leadership
4. Collaboration nation
5. The world of interruption
Managers are increasingly recognising that innovation is an essential ingredient in the drive to compete, thrive and differentiate and organisation from its competitors.
What is Innovation?
To effectively manage innovation it is essential to have a clear definition of what it is and for this definition to be shared by everyone who is expected to contribute to the effort involved in innovation. It is also crucial to differentiate innovation from the concept – creativity.
The dictionary definition that innovation is ‘the act or process of inventing or introducing something new’ is inadequate for management purposes because it fails to address the ‘why’ of innovation in organisations. A far more useful definition for management and leadership purposes is that:
Innovation is the conversion of creative ideas into valuable or profitable solutions
This definition works if you are managing in a profit making organisation because innovation is usually focussed on improving the bottom line. It also applies in public sector and not-for-profit organisations whose primary focus is likely to be on creating value for communities or service users.
Ultimately, innovation is not about a product, service or solution for its own sake – it is about the effect of the product or solution on those who benefit from using it. True innovation will cause the user of the innovation to do things differently.
Creativityis about using imagination to generate new or interesting ideas. Innovation transforms those ideas into implementable solutions which deliver new value. When creative teams and organisations fail it is usually not a failure of creativity; far more often they have lacked the mechanisms for implementing creativity in a way that would deliver measurable value.
Innovation also needs context. In contemporary organisations managers should think of innovation as the creation of new ideas which generate outcomes in keeping with the overall strategic imperatives of the organisation. Innovation must also be consistent with sustainability for the organisation – innovation has failed if client value is achieved but there are detrimental consequences for the organisation.
What Innovate?
In a general sense, organisations must innovate in order to respond to changes in their environment and, like all living organisms, organisations must adapt in order to survive and thrive. The purpose of innovation differs however, depending on the type of organisation. A government funded, not-for-profit provider of social services must innovate in order to do more with the same resources, and sometimes with fewer resources – for example if government funding is lost. Profit making organisations innovate in order to attract new customers, to compete and to stay viable. A membership based organisation or professional body innovates in order to better serve its members.
It is useful to think of four types of innovation and to be clear which types apply to your organisation or team.
1. Product and Service innovation includes both new offerings to customers and clients as well as enhancements to existing products and services. The speed of product innovation in some sectors (technology in particular) can eclipse the importance of service innovation but they are often equally important.
2. Process innovation can provide the basis for clear differentiation between your products and services and other choices available to consumers. This is as true in the not-for-profit sector where organisations compete for scarce funding as it is in the commercial sector. Process innovation may not be seen by your customers but its effects are experienced by them. For example, a better way of dealing with complaints.
3. Management innovation improves the way an organisation is managed and led. Virtual teams, job sharing, values based leadership and behavioural interviewing are all examples of innovative approaches to management; creative ideas which have delivered value to organisations and their customers.
4. Marketing innovation (also known as Sales or Customer Experience Innovation) can involve any of the seven ‘P’s of marketing; product, price, promotion, place, packaging, positioning and people - provided unique ideas are applied to deliver measurable value.
Practice Tips
The following tips will assist managers whose job involves managing innovation in any way to apply the concepts outlined above:
- Make sure your team has a clear definition of what is meant by ‘innovation’ in your particular setting. What are the aims of innovation? Do individual staff members have the scope within their role to be innovative? What, if any, restrictions are in place which limit staff members’ scope to innovate?
- When you ask staff to ‘be creative’, make sure there is shared understanding (you, them and, if necessary, your boss) about the purpose. Why do you want them to be creative? How is this linked to innovation needs? Who will ultimately benefit?
- Check your own contribution to innovative effort. How are you supporting staff to be innovative? Are you doing anything that might inhibit their creative efforts?
- Be sure that the expectations you set for staff to be innovative are consistent with the goals you expect them to meet and the ways in which you intend to measure their performance.
- Discuss your expectations with staff and ask what support they need. This is the way to develop shared understanding of what innovation means in your particular setting.
Nicholas Oddy, BMgtSt, GradDipPsych, GradDipBMgt
Director
Corporate Innovation Australia
References
Centre for Creative Leadership (CCL), Leading Effectively Series, www.ccl.org
Haman, G. (2006). KnowBrainer Accelerated Innovation & Creativity Tool by Solutionman v4.0 (Innovative & Creative Thinking Tool Kit), http://www.solutionpeople.com/index.html
Higgins, J.M. (1995) Innovate or Evaporate: Test & Improve Your Organization’s IQ; Its Innovation Quotient. New Management Pub Co
Merrill, P. (2008) Innovation generation: creating an innovation process and an innovative culture, ASQ Quality Press