Innovation should be the lifeblood of business, yet its very existence is threatened in most businesses as explained in part one of this series, in spite of the facts that innovation fuels growth, cements collaboration with clients and ensures ‘ahead of the pack’ leadership.
Innovation in many companies is an accident waiting to happen and often predicated on customer demand. Not a bad thing, a limitation, usually brought about by the need for companies to reduce and streamline production costs.
Innovation As Business Development
When instead you view innovation as a must-have a component of business development, you consider innovation as an essential cost of sales as well as insurance. Now the chances for Innovation to play a key part in an organisations future are much enhanced. This kind of positioning of Innovation are commonly found in long term view, successful companies.
There is constant innovation in the generally considered ‘dull’ companies such as insurance and banking for instance. On the inside, operations are far from dull, crisscrossed with all sorts of difficulties with risks spread across a range of diverse partners covering all sorts of eventualities with some even leading the way in areas such as cybercrime.
The Financial Solution
An increasingly accepted method of innovation funding is referred to as metered funding, where an amount is agreed and come what may, whether results are forthcoming or not, a supply of finance is maintained.
As otherwise, without metered funding, innovation teams are constantly in survival mode, fighting for a budget. Not knowing from one quarter to another if they are going to remain is wearing. Lack of consistent funding, no matter how bright the idea is great for triggering good people to leave.
Innovation Saves HR
People in most organisations become complacent, what was once new, competitive and perhaps innovative becomes the status quo. After every innovation, there is a competitor that will catch up. These are the normal, expected traits. The question is would you like to copy others or lead them? The answer by many is a preference to lead.
There is a reason that small companies often get great talent and for talent to leave the larger companies, it is simply because talent has a better chance of standing out and gaining recognition, and of course, financially they are more likely to share in the rewards. This is not to say that this cannot happen in larger companies. However, the truth is that larger companies do not create these conditions of opportunity and so good people with bright prospects leave.
In the same way as ring-fenced, metered funding works, larger companies can create divisions that are designed to cultivate, recognise and reward individual contribution, a simple structural change is all that is needed to harness innovation and share in the success of bright ideas.
The opposite normally occurs. Bright people leave, their ideas germinate and flourish, now the former employer buys the entire company for millions or billions. A regular event, it’s obscenely evident and a regularly recurring, overly expensive, unnecessary wasteful strategy. The defence invariably a good one: we did not know ‘it’ would work until it did.
Yet countless organisations merge and acquire often resulting in separated operations, duplicate functions and disparate systems that all need to join up, made difficult if not impossible as a result of the brain drain that inevitably occurs. There is rarely a practical integration strategy (beyond the normal platitudes), instead, there are fights and tussles where the strongest inevitably wins to the detriment and destruction of the business. Mayhem rules and sometimes this results in the sum of the parts becoming worthless as opposed to being worth more.
Instead, simple conversations should be encouraged to create open spaces to encourage collaboration and innovation, to discover and explore the areas of potential. Simple conversations create the glue of collaboration and spur excitement to innovate and create instead of destroy and dismantle.
Where enormous financial pressure may be the catalyst, simple conversations can be the tonic. Conversation in negotiation is quite different from collaborative and innovation. A company needs to recognise the phases where the different approaches can work to better effect.
Simple solutions can be created through easy to organise, very low-cost exercises, ran as workshops or roadshows. Forthcoming ideas and positive sentiment can be quickly rolled out.
It’s always a great time to create a buzz and provide reasons for people to stay beyond the pay.
Bookmark this page, part 3 is almost ready.