by Matt Connolly

The 4 dimensions of successful innovation

Sep 27, 2017
CIOCTODigital Transformation

Technology is not the answer to your company’s survival. It’s purely an enabler.rn

innovation idea
Credit: Thinkstock

Pushing out some AI chatbot front-ended PoC might get you a few headlines. But it’ll do nothing for the long-term survival of your company.

Technology is not the answer to your company’s survival. It’s purely an enabler.

Industry is changing fast; companies now recognize the need to adapt, innovate and think differently. And I’m sure most of you reading this will be well underway with your x-year transformation programs.

My question is how flexible is your approach and how relevant will the output be when you finish?

Most of these programs of change will be managed by a consultancy with equally outdated methodologies; the agreements will have been made by a leadership team that are most likely the root cause of needing the consultancy in the first place; and who in their right mind would sign off a 3+ year piece of work without allowing flexibility to adapt to every changing market conditions?

I’ve spent the past few months with a team of MBA students from the University of Bath’s MBA. The brief was for them to build a framework to assess the likelihood of a company’s disruption. Or to put in a more positive light, what are the key areas for a business to focus upon to awaken innovation and unlock potential?

The answer probably won’t surprise most of you. There were four areas – three internal to a business, one external:

  1. Leadership
  2. Organizational culture
  3. Structure
  4. Competitive environment

To wrap this together, at its most simple, leadership determines innovative behavior, culture is an enabler for innovation, and organizational structure determines the ability to foster innovation.

Adding to the great work the Bath (UK) MBA team produced, I thought it’d be good to layer a few insights from clients who are in the throes of their business transformation…and generally ignore the advice from friends/connections in the big consultancies.

NOW is the time for new leadership

“Surround yourself by people more talented and competent than you.”

An old one but a classic. As clichés go, it’s pretty much gospel in the new venture world and yet, within established corporations, half of all company failures can be attributed to the poor decisions made by leaders within an organisation.

So why are these leaders failing? And how come startups, that were seemingly set up yesterday, can so quickly rise to such meteoric valuations and fundamentally disrupt businesses that have been trading for so many years?

I put it down to leadership types – transactional and transformational. More importantly, the recruitment and evolution of the wrong kind of leader.

Transactional leaders (these are the wrong kind) tend to focus on short-term goals, motivating staff by appealing to their own self-interests, whereas transformational leaders (the right kind) will motivate through higher ideals, moral value and encourage staff to put the team/group/company first.

Think Jeff Bezos, Larry Page, Elon Musk.

They’re all charismatic individuals who openly communicate a sense of where the company is heading; develop the skills and abilities of followers, and encourage innovative problem solving. They build trust, honest communication, encourage different ideas and challenge established beliefs.

It’s all pretty obvious when written down. Of course a company will want the visionary, inspirational, transformative leaders at the helm. Yet very few companies do have one.  

You’ve got the money. Now it’s time to reassess your needs, evaluate your team and rebuild your leadership. And if you don’t sort it quickly, you probably won’t have the money for long.

Knowledge-driven behavior

Culture is a beautifully inimitable source of competitive advantage within a business. But it’s also brilliantly intangible and difficult to get right.

Before I go into a rant about the importance of culture, let’s give it some definition.

An organizational culture is a system of shared assumptions, values and beliefs which govern how people behave. It says so in Wikipedia and so must be true.

What I see time and time again is culture designed to maintain the status quo of a business; autonomous structures that drive consistency through standardized behaviors. And for sure you need some of this when you’re operating at scale, but equally to have a culture closed to opportunities or receptive to innovation will only result in failure.

So how do you break this?

Creating agility in a company’s culture is the answer. And it has two dimensions: an intellectual aspect – the ability to identify opportunities to pursue, and a physical perspective – the way the business responds.

In practical terms, it’s key to encourage the learning of new skills alongside the continuous tracking of market changes. And when they feed into the business, make sure the company adjusts and reconfigures to incorporate new knowledge.

Money can’t buy success

While large organizations have the resources to foster, create and scale disruptive innovation, it’s often their internal processes which will curb success.

Large organizations have, over time, developed complex hierarchies – designed to process work efficiently, predictably and effectively through departments and divisions with clear reporting relationships and accountability.  

And this isn’t a bad thing. These structures contribute to the stability of the organization and will often provide a near-future competitive edge. However they also make handling rapid change super challenging compounded with our fast paced world, it can make for a tricky time.

As a result businesses need to build responsive, agile, network-like structures which can react with greater speed and creativity than the current. These need to be designed to augment or sit alongside the current structures. Some will bring these pockets of structure in-house (although most struggle), others will set up external lab style environments and some will simply outsource the problem, I mean function, to external agencies.  

Market scanning

The world is changing at pace.

Companies are rethinking, restructuring and, in many cases, diversifying into new sectors to hedge their risk of disruption. Strategies to scan, learn and adapt to the new tech venture landscape are fast becoming pivotal to a company’s horizon planning.

The new ventures you’ll read about today will be different to those you were tracking yesterday; your customers’ expectations are continuously evolving; and your competitors will slowly get the hang of this innovation malarkey if they haven’t already.

Bury your head in the sand for a few years of “transformation,” and it’s guaranteed you’ll come up for air in a new world – one where you don’t have permission to play.