Did you know that you can run a well-established business without ever having to innovate?
It’s true. You can copy a template from a successful business in a neighbouring region. You can surround yourself with hard-working employees. You can have amazing relationships with exclusive vendors. You can nab top-tier clients for your products or services. Each of these principles doesn’t involve much innovation.
If you’re in that category, and you’re happy about where you’re at, then this article isn’t for you. BUT if you belong to a happy subset of companies that want to explore growth opportunities and offer groundbreaking new discoveries in your field, then read on!
Innovating is even harder to do during a global pandemic. COVID-19 has ravaged the business landscape. But we’re also eternal optimists, so let’s look at some ways that the pandemic can present an opportunity for businesses to innovate, rather than to be an impedance.
Recently, McKinsey & Company ran a study of over 300 companies and they interviewed 2,500 executives. The survey spanned many industries in many countries. The result? A fascinating illustration of eight important principles that the top businesses use to carry forth their innovation activities.
The study answers the question: of the companies that are innovating – how do they do it?
The eight principles are applicable even during a global pandemic and economic downturn. They are divided into two main categories of innovation, each consisting of four parts.
The first is a group of practices that are strategic and creative. They set the groundwork so that innovation can sprout up in an organisation. The final four practices are about the mechanisms of innovation. They describe the “how” of doing innovation consistently and repeatedly.
Category one: strategies to lay the groundwork for innovation
A vision can be a catalyst. It can also be a nagging point. Executives that run around saying “we’ve got to be passionate and we’ve got to be innovative” without defining those two principles can often do more damage than good.
Amidst a global pandemic, this rhetoric is even more redundant. Employees are probably already overwhelmed with hearing how the nature of work is changing. They’re adopting remote work practices and tired of the preaching and the continually-moving timelines for when normality returns.
Rather: the most successful business innovators are those that implement metrics or some process by which the value of innovation can be captured. They tie those metrics to business objectives, whether they be to “generate 33 new clients” or “to hit $945,000 (or another arbitrary number) in annual sales.”
The McKinsey report accurately describes how researching every possible source of innovation is impractical. We’d go one step further to say it’s impossible. Therefore, an excellent alternative for innovation is a method to simply pick what direction to head – like a compass. Then, it’s important to apply good governance principles so that the activities involving the chosen innovation are consistent and widely-adopted in the company.
With COVID-19, resources are tight for many since economic demand has been disrupted or supply chains shattered. However, an opportunity remains nonetheless.
- The most successful innovators were the ones that financed more innovation projects than they could afford.
Initially, this might sound counterintuitive but if you dig deeper it makes sense. With a short leash on resources, being able to kill a project that isn’t promising is actually easier to do if you’re cash-strapped.
In the discovery stage of the innovation process, are you simply waiting to strike gold? Do you think a junior analyst will simply and magically dream up a game-changing technology in their sleep?
Or, do you have a rigorous system in place to prospect for new ideas?
|Innovolo’s Innovation-as-a-Service can help here. It can help a company focus on ideation, with the discovery stage being guided by three important principles:
A. Find a problem to solve;
B. Create or use a technology that offers a solution; and, of course,
C. Modify a business model to generate money from it all.
These are three powerful principles in ideation and new product discovery. You can use them as part of a rigorous problem-solving system to help discover new ideas for growth.
Evolution is about more than creating a trendy new product. True evolution happens when entire business models are altered or industries are disrupted. It can be a powerful source of innovation.
Modifying a business model is an especially important principle as millions of businesses are forced to pivot during the COVID-19 pandemic.
One auto dealership, in Pennsylvania, U.S., learned to quickly evolve its own business model. No longer able to seal deals with handshakes, the dealership pivoted its tactics. They consolidated online leads, ramped up digital technologies, and even conducted entire deals virtually. They even accompanied customers via Zoom for test drives. The result? They sold more cars in July 2020 than in any previous month in its 15-year existence. All that, plus they were in the middle of the strictest parts of the pandemic lockdown.
The evolution of business models is crucial for innovation both for short-term survival and long-term resiliency.
Category two: the mechanisms of innovation.
To be truly innovative, companies must be able to tear down walls that restrict them from testing new ideas. That includes a lack of access to customers and a lack of communication between the project teams.
Even small-and-medium-sized companies can get bogged down by the competing priorities and the bureaucracy of their own organisations.
|An Innovolo Innovation-as-a-Service package simplifies things greatly. With a dedicated innovation expert as a single touchpoint, the innovation process can be more easily coordinated from start to finish. They can take the complicated bits out of the hands of the business, meaning that ideas can accelerate faster than ever.|
The McKinsey & Company study asks respondents if they “launch innovation at the right scale in the relevant markets and segments?’. For many, that’s not an easy question to answer. Knowing “how much” and “where” to launch an innovation can be a tricky thing.
But the risk is still great – bad timing or incorrect scale can be death sentences for innovations. This is especially true with many long-established norms and trends being completely uprooted thanks to COVID-19.
One B2B business, an online platform called Geojam that strived to connect music fans with concert events, had to learn a tough lesson in scaling a launch just prior to a pandemic. COVID-19 burned up the live-events and hospitality industry almost instantly. With concertgoers no longer able to meet up at concerts, founder Sarah Figueroa was forced to scale in a much different way than she imagined. Her platform now connects artists in the film and music industries directly to fans, rather than through live events. The (new) launch of the service scaled much smoother thanks to the transition, with the platform raising $350,000 in investments even in the worst of the pandemic lockdown.
To be innovative, it’s important to be able to lean on a vast network of collaborators and contributors. It’s exceedingly difficult to innovate entirely on your own. A network enables the sharing of ideas and knowledge. This network can extend beyond geographic boundaries and new ideas can strike from any source so long as an ecosystem of collaborators is put in place.
|Let Innovolo extend your network
Smart collaboration is tough. An easy decision is to partner up with thought leaders and dedicated innovation collaborators. A designated expert in the innovation industry can amplify innovation activities by extending the number of connections a B2B business can create.
Mobilising forces within a company to be innovative can be a slow process. Collaboration and experimentation sometimes don’t come naturally. But that doesn’t mean it’s not important.
The most innovative companies know that innovation happens at an organisation-wide level. That’s why they have strong systems in place to stimulate and reward innovative activities throughout the company. For the top innovators, ideation and improvements are embedded in principles in the very structure of the organisation.
We’d love to talk with you! For more information about how Innovolo’s team of experts can apply these 8 essential principles to your small-or-medium sized enterprise, reach out today.