How To Connect Business With Innovation


By  Rijul Nadkarni ( L&T RBG ) 

When both innovation and business objectives are equally valued, broadly promoted and fully communicated, a culture naturally exists that fosters alignment of the two.  In this culture, top-down business objectives are communicated throughout the organization so that all levels are focused on addressing the corporation’s short- and long-term goals. It then becomes the innovators’ responsibility to align their activities in support of the corporate goals.

There are several ways to naturally bring these two camps together.  Jointly developing technology/product and business roadmaps encourages discussion and debate, forging linkages that guide actions.  Internal business and technology fairs highlight near term successes while raising visibility to long-term opportunities.

Despite massive investments of management time and money, innovation remains a frustrating pursuit in many companies. Innovation initiatives frequently fail, and successful innovators have a hard time sustaining their performance—as Polaroid, Nokia, Sun Microsystems, Yahoo, Hewlett-Packard, and countless others have found. Why is it so hard to build and maintain the capacity to innovate? The reasons go much deeper than the commonly cited cause: a failure to execute. The problem with innovation improvement efforts is rooted in the lack of an innovation strategy.

A strategy is nothing more than a commitment to a set of coherent, mutually reinforcing policies or behaviors aimed at achieving a specific competitive goal. Good strategies promote alignment among diverse groups within an organization, clarify objectives and priorities, and help focus efforts around them. Companies regularly define their overall business strategy (their scope and positioning) and specify how various functions—such as marketing, operations, finance, and R&D—will support it.

Aping someone else’s system is not the answer. There is no one system that fits all companies equally well or works under all circumstances. There is nothing wrong, of course, with learning from others, but it is a mistake to believe that what works for, say, Apple (today’s favorite innovator) is going to work for your organization. An explicit innovation strategy helps you design a system to match your specific competitive needs.

Finally, without an innovation strategy, different parts of an organization can easily wind up pursuing conflicting priorities—even if there’s a clear business strategy. Sales representatives hear daily about the pressing needs of the biggest customers. Marketing may see opportunities to leverage the brand through complementary products or to expand market share through new distribution channels. Business unit heads are focused on their target markets and their particular P&L pressures. R&D scientists and engineers tend to see opportunities in new technologies. Diverse perspectives are critical to successful innovation. But without a strategy to integrate and align those perspectives around common priorities, the power of diversity is blunted or, worse, becomes self-defeating.

Like the creation of any good strategy, the process of developing an innovation strategy should start with a clear understanding and articulation of specific objectives related to helping the company achieve a sustainable competitive advantage

Just blindly claiming ” We should innovate as everyone does so ” isn’t very intelligent  . At least these basic questions need to be answered before opting for the “Innovation Path “-

  1.  How will innovation create value for potential customers?
  2. How will the company capture a share of the value its innovations generate?
  3. What types of innovations will allow the company to create and capture value, and what resources should each type receive?
  4. How will manage the trade offs ?

 

An explicit innovation strategy helps you understand which practices might be a good fit for your organization. It also helps you navigate the inherent trade-offs.One popular practice to manage trade offs is  crowd sourcing. The idea is that rather than relying on a few experts (perhaps your own employees) to solve specific innovation problems, you open up the process to anyone (the crowd). Crowd sourcing has a lot of merits: By inviting a vast number of people, most of whom you probably could not have found on your own, to address your challenges, you increase the probability of developing a novel solution.But crowd sourcing works better for some kinds of problems than for others. For instance, it requires fast and efficient ways to test a large number of potential solutions. If testing is very time-consuming and costly, you need some other approach, such as soliciting a handful of solutions from just a few experts or organizations

Another practice subject to trade-offs is customer involvement in the innovation process. Advocates of “co-creation” approaches argue that close collaboration with customers reveals insights that can lead to novel offerings .

Again, the choice between a demand-pull ( originated at customer end ) and a supply-push ( the firm innovates and the customer is forced to use the technology ) approach involves weighing the trade-offs. If you choose the former, you risk missing out on technologies for which markets have not yet emerged. If you choose the latter, you may create technologies that never find a market.

Often when the innovation bug gets to the decision makers , then the processes will be monitored from close quarters .

How to address the issue when new ideas with new and emerging data are asked for by the leadership group –

  1. If management asks for financials of the proposed innovative strategy , then provide them in the most elegant assessment.
  2. Get the most trustable employees to do the number crunching for you as if the numbers are convincing , half the task is completed .
  3. Develop a good template for advancing business cases on ideas and concepts connected to winning platforms and value propositions
  4. Reverse engineer concepts and rapidly test key assumptions and uncertainties
  5. Be clear about the cost of not pursuing the idea or if a competitor is pursuing the same .

Creating a capacity to innovate starts with strategy and it is duty of the most senior leaders of the organization to do the same .  Innovation cuts across just about every function. Only senior leaders can orchestrate such a complex system.The final challenge facing senior leadership is recognizing that innovation strategies must evolve. Any strategy represents a hypothesis that is tested against the unfolding realities of markets, technologies, regulations, and competitors. Just as product designs must evolve to stay competitive, so too must innovation strategies.

What is expected of Leaders in the process ?

  • Leaders should be spending between a good chunk  of their time on what is next for the company considering they have a management team running the day-to-day business
  • Link innovation investment to the growth gap that innovation is expected to close
  • Insight for innovation investment amount comes more from studying past investments within your own company versus looking outside at competitors or other companies that you admire — who most likely are pursuing different business and innovation strategies
  • Rotation programs and giving employees some flex-time are clever ways to drive innovation without making huge demands for resources

Like the process of innovation itself, an innovation strategy involves continual experimentation, learning, and adaptation and it is the duty of the Organisation head to make sure innovation enthusiasts blend with  an innovation strategy .

 

Sources :

Harvard Business Review : Innovation 

Business News Daily : Strategy