Do you organize your business for Innovation?

There is a popular saying attributed to Greek author and philosopher Plato (427 BC – 347 BC, The Republic) that says  “Necessity is the mother of all inventions”.  This has proven true for all the history of mankind from 500,000 BC, when fire was discovered by Homo Erectus (early humans) until the most modern times when human race is able to invent sophisticated and complex models for social and economic order.

While this is true that the inventions has played a big role in the advancement of human societies, it is also a fact that the benefits of these inventions has only been realised when someone (individual or people) is able to understand the use of this invention and employ this for public or private gains.

For example, fire was first tamed by early humans around 500,000 BC but it was primarily used as a defence against harsh weather out of necessity. It’s use to cook food was not discovered until much later when the humans developed their sense of taste.

Take another example of “printing press” which was first invented by German Johannes Gutenberg around 1440 in Roman Empire. As the technology developed the book printing and book making started but it was not until 1605 when the first newspaper  Relation aller Fürnemmen und gedenckwürdigen Historien was published in Strasbourg by Johann Carolus. It was Johann who discovered  there was a need or desire among people to know about the events happening in the the society and he tried to satisfy this need using an existing technology i.e. printing press.

An invention can be defined as a discovery or an idea about something. An invention does not automatically lead to widespread use.

Innovation is the process of linking an invention to satisfy a specific need in a business or social context. The people who work on finding ways to do this are called as innovators. The people who take the existing technologies and package them together and commercialise it as an offering and build organisational structures to support this, are called entrepreneurs.

As I explained in my other blog “Why companies need innovation? A market competition perspective”, innovation is not a choice today for any company rather it is a must for sustainable growth in today’s marketplace.

So if we agree that innovation is key, then what is the ideal recipe for an organization to promote innovation in its ranks. Does it mean that you need to create a creative culture or need to hire people who can think outside the box? Or does it mean that tech companies can follow the Google model where all software engineers get time to work on their own projects? Or the solution is in organizing an innovation or hack day?

In my opinion, all of these are just steps in an organizations journey to become more innovative and relevant to the market. They create a momentum for the people to start thinking and come up with ideas (some good and some not so good).

Before this happens however, there are two very important steps which are often ignored or are not executed properly.

First, understand you competitive environment and recognize your strengths and weaknesses in a systematic way. This realization along with the knowledge of market opportunities will provide you many choices to how to differentiate your business against your competitors. This will inform you who is your competitor and who is your friend. This is the basis of defining a business strategy. A clear and well articulated business strategy is very important for every organisation which is embarking on an innovation journey as it acts as a guiding force for all innovation activities the organisation takes.

Second, create a governance model or idea selection process which can take all new ideas from all parts of business and evaluate them for the value they will create for the organisation for the business strategy. I will go into the detail of this later but this is an important building block of the innovation process and the absence of this will be like holding sand (ideas) in one’s hand. It is also important to make everyone aware of this process so that people understand how this works and how their ideas are evaluated.

Now obviously you need to hire good people who are passionate about their jobs and want to solve new problems and you can use some of the following techniques to generate new ideas and promote creativity:

• Create a stimulating environment by allowing people to work in smaller teams in casual settings ideally with cross functional teams
• Remove barriers between engineers and their customers
• Promote cross functional collaboration
• Give people or cross functional groups some problems and allow them to come up with solutions. Give them some time and resources to do that. As I wrote earlier, some people choose to follow Google model or Facebook model. Some companies also use ideation, brain storming and other techniques to get ideas.
• Invest in technologies or processes which allows teams to test their ideas with the end users quickly and effectively.

Overall all of these building blocks are important for any business to have an organisation wide innovation process. There are many advantages of this innovation model:

• It ensures that organisational resources are spent on the initiatives that support business strategy.
• Articulating a clear business strategy guides all team members to understand what is the purpose and goals of innovation.
• Using an innovation governance process allows the management to filter and select the best ideas which delivers strategic value to the business.
• People will be happy to know the organisation really values their ideas and has a process to evaluate and implement (transparency is key).

By following these steps organisations can come up with a comprehensive innovation system.

I have provided my thoughts at a high level and organisations will have to adapt this at the business unit and corporate level as per their business structure and needs.