Every organisation pays lip service to innovation‚ but actually fostering it can be difficult. Even some of the biggest and most successful organisations in the world have struggled when it comes to generating new ideas and new ways of working. In recent years‚ increasing numbers of organisations have turned to external partners to get them out of innovation ruts‚ but how do you know when this is the right approach for you?
Obviously‚ we’re biased here at hedgehog lab because we have adopted this model ourselves. But we’re level-headed enough to admit that not every organisation is going to want or need an innovation partner. Some companies will be able to achieve the same goals with an internal team or some may benefit more from bolting on innovation through investment or acquisition in another business.
But a simple truth remains: established organisations are invariably not equipped to innovate on their own. Large‚ successful businesses are well-calibrated machines that have honed their processes over decades‚ meaning they’re usually better at executing what they already know rather than innovating new ways of working.
Organisations looking to shake themselves out of their innovation malaise have three options:
Setup their own internal innovation leads
Acquire or invest in a related startup or organisation
Team up with an innovation partner.
But with all three approaches having their own pros and cons‚ how do you know which route to take? Innovation leads can help foster an innovation but can be mired in business-as-usual thinking. Acquisitions and investments can help transplant new thinking and innovation to your business but are financially risky.
Innovation partnerships‚ where your business teams up with a consultancy or startup to work on innovation projects‚ can be a perfect middle ground for the right organisation.
Realising when you’re lagging behind.
Fostering and sustaining innovation is hard. Even the biggest and most innovative companies of their day have struggled to maintain their market-leading momentum over the years. Think about Microsoft‚ Nokia and Polaroid‚ three companies who were all paradigm-shifting leaders in their field who‚ at one point or another‚ eventually ran out of steam.
Even Apple‚ today’s innovation standard-bearers‚ have seen their star dim after their run of era-defining products has slowed in recent years. And with the advent of artificial intelligence (AI) and automation‚ the process of business obsoletion is likely to be turbo charged in the coming years.
What’s important to take away here is that every company falls into an innovation rut eventually‚ so it’s nothing to be ashamed of. The hard part is realising that you’re lagging behind in the first place.
But how do you know if your innovation efforts are failing? Here’s a few tell-tale signs that you should watch out for:
You think in terms of quarters rather than years
Short-term targets are important‚ but innovation doesn’t happen with short-term thinking. Experimentation‚ which is the engine room of innovation‚ is difficult if you’re hung up on your quarterly figures and targets. The benefits of innovation often don’t materialise until months or years down the line‚ so climbing out of the habit of short-termism is crucial.
Change is sluggish or doesn’t happen at all
You and your colleagues might recognise that you’re in a creative rut‚ they might even have ideas about how to get out of it‚ yet still‚ nothing happens. Particularly in the case of larger organisations‚ the business is simply not set up for innovation. Like a train on a track to nowhere‚ it can be difficult to change course.
Your teams don’t speak to each other
Creativity and innovation rely on collaboration and cross-team thinking. Different disciplines bring new thinking to different areas of the business‚ so siloing people off‚ either advertently or inadvertently‚ can be a significant barrier to effective innovation.
Does this sound like your organisation? If yes‚ you’re probably in need of an adrenaline shot of innovation. More specifically and to quote Gary P. Pisano of Harvard Business School‚ you need an innovation strategy.
Your innovation lacks focus.
An effective innovation strategy is a prerequisite for fostering innovation within your organisation‚ and will help to drive purpose and focus.
If you’re struggling to come up with a purpose for your innovation drive‚ an innovation partner probably won’t be able to help you find it. You need to have your purpose first‚ before partnering up; otherwise‚ you’re likely to just be innovating for innovation’s sake.
Set clear goals and targets for your innovation drive: these might be revenue related‚ you might aim to release a specific amount of new products within a set timeframe‚ you might even look to launch in an entirely new market or vertical and set growth targets against this. Whatever it is‚ it needs to be quantifiable and it needs to be assigned to specific people in the organisation to protect against ‘not my job’ thinking.
While an innovation partner won’t be able to help you find your purpose‚ they can help to shape your strategy and can be an invaluable guide to lend focus to your efforts. If they’re really good‚ they’ll have a deep knowledge of where your sector is going and have an implicit understanding about how your innovation strategy can help you capitalise on upcoming market opportunities.
Internal innovation leads will have this deep knowledge‚ but might lack the understanding about how innovation might be able to help. On the other hand‚ startup investments or acquisitions might bring the goods when it comes to innovation but may be lacking when it comes to the market landscape.
You’ve got too few ideas.
A dearth of ideas has been the death of many businesses over the years‚ particularly in the age of the smartphone which has accelerated the slide to irrelevance for companies who fail to keep things fresh.
It’s a well-worn narrative now‚ but digital technologies and the Internet have upturned countless business models in the last couple of decades. Industries ranging from private vehicle hire (Uber)‚ holiday accommodation (Airbnb) and retail (Amazon) amongst many others have all been upended by nimble startups‚ backed by cheap cloud infrastructure‚ that weren’t afraid to experiment and embraced the need for failure.
This revolution has blindsided incumbents the world over‚ and in many cases has driven them out of business. Stuck in their old ways of working‚ these legacy businesses foundered due to their lack of new and innovative ideas‚ the dearth of innovation sealing their fate and consigning them to history.
Savvy organisations realise that‚ in order to stay relevant‚ they have to continually generate new ideas and adopt one of the three strategies outlined at the beginning of this article to help them do so. For example‚ Samsung‚ the world’s biggest smartphone maker‚ has adopted a strategy of investment and acquisitions through its Ventures arm to continually generate new products and ideas for its flagship devices.
Samsung’s investments in startups‚ such as payments platform Mobeam or news platform Upday‚ have made a point of maintaining portfolio companies as separate businesses to foster that creative energy.
But very few organisations have the spare cash to spend millions on acquisitions or investments‚ or the stomach for risk that this strategy inevitably entails. And for organisations where there’s a dearth of new ideas‚ establishing innovation leads is unlikely to have the desired impact—they’re going to struggle to break free of your company’s groupthink.
Innovation partners can be the perfect middle ground for companies who aren’t generating enough new ideas internally‚ but who don’t have millions to spare on acquisitions or the desire to gamble on startup investments.
Whether through design sprints‚ prototyping or other approaches‚ an innovation partner can inject some creative energy into your business and help to ask hard questions about your business model and processes that might not have been asked before.
You’ve got too many ideas.
There’s a common misconception that teaming up with an innovation partner stems from a company lacking in ideas and innovative energy‚ but this isn’t always the case.
Sometimes‚ a business can be swimming in new ideas from across its operations‚ and it can be effective at encouraging employees to work on these new ventures. But having a wealth of ideas is a problem in itself. Which ones do you take forward? Which ones do you cast aside? And when?
Like Bilbo Baggins before his 111th birthday‚ innovation in an organisation drowning with ideas can feel like butter scraped over too much bread; too few resources spread over too many projects.
Discerning between innovative projects with business potential and mediocre ones can be challenging‚ leading organisations to waste time and money on new ideas that never really had any legs in the first place. The famous example of Coca Cola’s disastrous New Coke is an often cited example of this.
An external partner that knows what they’re talking about can help to bring focus to your innovation efforts and help you strip back your efforts so that you’re not over-stretching yourself.
An even better partner will know how to say no to your more fanciful ideas and be constructive about offering up alternatives. By existing outside of the politics and power structures of your organisation‚ an innovation partner can be empowered to make the sort of hard decisions that your internal teams can’t.
Taking the plunge.
The pointers above should help your organisation’s soul searching‚ but there’s no easy way to decide whether you need to get an innovation partner on board or not. If your innovation efforts are stuck in a rut‚ if the creative juices of your teams aren’t flowing and if you don’t have the means to bolt on expertise through investment‚ then it’s certainly something you should be giving serious consideration to.
Gone are the days of bloody-minded individualism‚ organisations of all stripes are happy to admit that they haven’t got all the answers and it’s no longer viewed as a weakness to seek external help from digital experts.
If this article has convinced you to take the plunge‚ the next step is selecting the partner that’s right for you. Not all partners are created equal. Just like when building your teams‚ chemistry and cultural fit are all important factors that can decide whether your innovation drive is a success or not.
Stay tuned to the blog where we’ll have some hard-won advice on selecting an innovation partner that’s right for your business.
What do you think? Let us know your thoughts on Twitter at @hedgehoglab.