 "Who says innovation is dead?")
If you thought innovation is dead, think again, as you are absolutely mistaken. While some commentators have been asserting recently that innovation is, at best, underwhelming, or at worst, a thing of the past, it is absurd to digest that. According to insights from a recent C-suite study, which analysed the experience of thousands of C-suite executives and other data, one thing is clear the presumed death of innovation is not supported by the facts.
Not only does innovation remain strongly correlated with value creation, it is a key factor in financial outperformance. Innovation is more than just a 'big idea.' It is an ongoing process of creating value from something new - new ideas, new technologies, new products, new processes.
As economies become more connected, all aspects of business are confronting major change. Innovation is no different. Having once been the purview of the few, successful innovation today has become more collaborative, open and continuous.
The good news is innovation is very much alive and thriving in outperforming organisations. Combining product, operational and business model innovation, these organisations are sailing smartly in a challenging and complex environment.
Businesses are realising the power of technology in their transformation. Those that embrace big data and analytics are finding new revenue streams, improving customer satisfaction and simplifying their supply chains. Those that don't are struggling.
As today's customers and citizens become ever more empowered and vocal about being served with immediacy according to their individual needs, desires and aspirations, the future will belong to those organisations that use understanding, insight and technology to provide ever-expanding value.
With that in mind, business leaders are left with a simple question: are you ready to ignore the doomsayers and extend innovation throughout your organisation? If the answer is 'yes,' you, too, can take your place in the ranks of the new outperformers of the decade and beyond.
How do we tread this path of success? There are plenty of things that we can do to make innovation happen that might, at first, seem smart. Here the five new rules of the game which enterprises need to mull to get transformed and evolve smarter:
Agility is becoming the currency of leadership: New technologies are making imitation easier, globalisation enables competition from anywhere in the world, and convergence means that organisations in previously unrelated industries are becoming competitors. In this environment, the ability to be nimble and responsive to rapid change from multiple sources becomes a critical driver of success.
Today's unthinkable disruption is tomorrow's 'business as usual': Recent history is littered with examples of organisations that have identified innovative opportunities, but failed to pursue them for fear of cannibalising existing businesses. These organisations trade off short-term placation against medium-term survival. Don't be afraid to make radical leaps. Look for disruptive opportunities and investigate them impartially. Always ask the question: "If I don't do this, will an existing or new competitor decide to?
Partners expand the possible: Today's competitor is tomorrow's partner. Partners need not be other organisations or institutions; they can be communities of interest, individuals, customer associations or non-profits. Successful partnering extends the capabilities of participating organisations way beyond what would be possible alone - opportunities, otherwise unattainable, can be pursued together. Identify common interests and invest in virtual and physical environments to facilitate interaction.
Innovation is for everyone: Employees and partners alike should be thinking about better ways of doing things, new opportunities for products and services, different pricing structures and radical shifts in markets and business models. Value-generating behaviours should be encouraged and rewarded. In this way, a compelling culture of innovation will emerge, creating a self-sustaining engine of innovation and success.
A comprehensive approach to innovation comprises exploration of the full range of possibilities and then identifies and pursues specific opportunities. Systematic innovation does not occur in the absence of structure and discipline, it requires development of innovation capabilities. This necessitates an "innovation framework" which outlines the fundamental capabilities and assets that organisations must configure to generate and manage innovation.
Significantly, innovation management and governance deals with the nuts and bolts of innovation - those things that support the actual process of innovation within organisations. Project and portfolio management, analytics, knowledge management, incentives and rewards, and communications are all essential to managing innovation processes efficiently.
Innovation enablers comprise the organisational elements that underpin the practice of innovation and its likely success or failure. The availability of robust talent, receptiveness of organisational culture, internal and external collaboration, tools and frameworks, and infrastructure all influence both the practice and probable outcomes of innovation.
While the actual components of the innovation framework are common across organisations, their specific qualities and application may differ dramatically between organisations. Successful innovation is not conducive to a "one-size-fits-all" philosophy. What succeeds in one organisation may fail in another. While the innovation framework provides the science, application of the innovation framework to specific organisations is partly art. Interestingly, successful enterprises are reorienting from internal efficiency and productivity to a new agenda where innovation, collaboration and strategy are the result of external engagement. Almost one half of organisations are now sourcing innovation from outside their enterprise. These leaders are creating a blueprint for business success in the 21st century: The Customer-activated Enterprise.
Collectively, we all need to ask, are we creating an environment in which innovation can flourish? How strongly, an enterprise is opening up customer influence, blending digital with physical, and crafting engaging experiences will determine who wins the race.
Not only does innovation remain strongly correlated with value creation, it is a key factor in financial outperformance. Innovation is more than just a 'big idea.' It is an ongoing process of creating value from something new - new ideas, new technologies, new products, new processes.
As economies become more connected, all aspects of business are confronting major change. Innovation is no different. Having once been the purview of the few, successful innovation today has become more collaborative, open and continuous.
The good news is innovation is very much alive and thriving in outperforming organisations. Combining product, operational and business model innovation, these organisations are sailing smartly in a challenging and complex environment.
Businesses are realising the power of technology in their transformation. Those that embrace big data and analytics are finding new revenue streams, improving customer satisfaction and simplifying their supply chains. Those that don't are struggling.
As today's customers and citizens become ever more empowered and vocal about being served with immediacy according to their individual needs, desires and aspirations, the future will belong to those organisations that use understanding, insight and technology to provide ever-expanding value.
With that in mind, business leaders are left with a simple question: are you ready to ignore the doomsayers and extend innovation throughout your organisation? If the answer is 'yes,' you, too, can take your place in the ranks of the new outperformers of the decade and beyond.
How do we tread this path of success? There are plenty of things that we can do to make innovation happen that might, at first, seem smart. Here the five new rules of the game which enterprises need to mull to get transformed and evolve smarter:
Agility is becoming the currency of leadership: New technologies are making imitation easier, globalisation enables competition from anywhere in the world, and convergence means that organisations in previously unrelated industries are becoming competitors. In this environment, the ability to be nimble and responsive to rapid change from multiple sources becomes a critical driver of success.
Today's unthinkable disruption is tomorrow's 'business as usual': Recent history is littered with examples of organisations that have identified innovative opportunities, but failed to pursue them for fear of cannibalising existing businesses. These organisations trade off short-term placation against medium-term survival. Don't be afraid to make radical leaps. Look for disruptive opportunities and investigate them impartially. Always ask the question: "If I don't do this, will an existing or new competitor decide to?
Partners expand the possible: Today's competitor is tomorrow's partner. Partners need not be other organisations or institutions; they can be communities of interest, individuals, customer associations or non-profits. Successful partnering extends the capabilities of participating organisations way beyond what would be possible alone - opportunities, otherwise unattainable, can be pursued together. Identify common interests and invest in virtual and physical environments to facilitate interaction.
Innovation is for everyone: Employees and partners alike should be thinking about better ways of doing things, new opportunities for products and services, different pricing structures and radical shifts in markets and business models. Value-generating behaviours should be encouraged and rewarded. In this way, a compelling culture of innovation will emerge, creating a self-sustaining engine of innovation and success.
A comprehensive approach to innovation comprises exploration of the full range of possibilities and then identifies and pursues specific opportunities. Systematic innovation does not occur in the absence of structure and discipline, it requires development of innovation capabilities. This necessitates an "innovation framework" which outlines the fundamental capabilities and assets that organisations must configure to generate and manage innovation.
Significantly, innovation management and governance deals with the nuts and bolts of innovation - those things that support the actual process of innovation within organisations. Project and portfolio management, analytics, knowledge management, incentives and rewards, and communications are all essential to managing innovation processes efficiently.
Innovation enablers comprise the organisational elements that underpin the practice of innovation and its likely success or failure. The availability of robust talent, receptiveness of organisational culture, internal and external collaboration, tools and frameworks, and infrastructure all influence both the practice and probable outcomes of innovation.
While the actual components of the innovation framework are common across organisations, their specific qualities and application may differ dramatically between organisations. Successful innovation is not conducive to a "one-size-fits-all" philosophy. What succeeds in one organisation may fail in another. While the innovation framework provides the science, application of the innovation framework to specific organisations is partly art. Interestingly, successful enterprises are reorienting from internal efficiency and productivity to a new agenda where innovation, collaboration and strategy are the result of external engagement. Almost one half of organisations are now sourcing innovation from outside their enterprise. These leaders are creating a blueprint for business success in the 21st century: The Customer-activated Enterprise.
Collectively, we all need to ask, are we creating an environment in which innovation can flourish? How strongly, an enterprise is opening up customer influence, blending digital with physical, and crafting engaging experiences will determine who wins the race.
Jeby Cherian
Vice-President and Managing Partner, Global Business Services, IBM India & South
Vice-President and Managing Partner, Global Business Services, IBM India & South