Thought Leadership on Talent and H.R. presented by Speed Raceway.
IBM, a 130-year old company, didn’t get where it is today without constant innovation. Disney started out as a cartoon studio and has evolved into a leading entertainment company always creating new products and new businesses. And Apple didn’t stop after it developed its first computer in 1976 – it has progressed into phones, online music, watches, and who knows what next.
Innovation is imperative in today’s fast-paced business world. No company will be successful by staying stagnant. As markets change, technologies advance and trends shift, you must continue to evolve to stay ahead of your competition. The challenge many businesses face is that they are so focused on the day-to-day – answering the needs of their existing customers – they seldom look ahead and anticipate future needs and trends.
In a recent survey from PwC, 56 percent of the respondents said that innovation is the main opportunity for growth in their companies. It is no longer a luxury, but a foundation for future growth.
Innovation doesn’t mean just developing new products or service offerings to meet customer demands. It can also mean entering new markets to boost revenue or streamlining processes to increase speed, improve quality, cut costs, or reduce time to market.
For example, while Tesla Motors was praised for its innovation of its self-driving car last year, Starbucks has been recognized for its new college tuition program aimed at retaining its hourly employees.
Customers have little patience today, especially younger generations that expect everything immediately. They no longer have the loyalty of past generations to stick with an outdated product and wait for it to catch up with the competition. They will easily move on to another option without a second thought, putting you at risk of losing both existing and prospective customers if you don’t innovate.
You can also run the risk of operating inefficiently if you don’t make the necessary changes to keep up with the times. By improving your business processes, you can save valuable time, money and resources. If you produce a product more efficiently, you may be able to cut costs and sell it at a lower price point than your competition – increasing your profit margin at the same time. Furthermore, stagnant companies are more likely to lose good employees who want to work for companies on the cutting edge of their industries, making innovation a priority for every business.
Innovation from the top down
The drive to innovate must come from the top. It is the CEO’s responsibility to provide the vision for their company and therefore, they must be the driving force for encouraging innovation throughout the organization.
CEOs are often wearing multiple hats and struggle to focus on the near-term challenges while also formulating a vision for the future. With short-term revenue goals, increasing competition and other demands that CEOs face on a daily basis, it is difficult to carve out the time to look to the future.
However, CEOs don’t need to take on the responsibility of developing new, innovative ideas on their own. They need to create an environment that fosters innovation from all employees on an ongoing basis and ingrain it into the corporate culture.
As the visionary, the CEO needs to empower others to generate new ideas and hold them accountable. The challenge is that employees are often uneasy about taking time away from their day-to-day responsibilities and are apprehensive about taking risks that might put their job in danger. Just as with other aspects of the business, such as reaching sales goals and meeting deadlines, innovation needs to be rewarded to motivate repeatable action. CEOs should inspire employees to be creative and encourage them to always think about continuous improvement.
Innovation has become so important to a business’s success that some organizations have appointed chief innovation officers responsible for leading innovation efforts on a regular basis. If your organization does not have the bandwidth for this position, you should ensure that you have a management team that is continually looking to the future and is sending the right signals to employees to encourage innovation.
Some companies have even created specific programs within their companies to drive innovation, including Adobe’s Kickstart initiative and LinkedIn [in]cubator program.
Although disruptive innovation can be powerful in taking a company to the next level, incremental innovation can be the difference between success and failure. Innovation needs to be ongoing. It shouldn’t be an ad-hoc process that the management team discusses once a year. You need to develop a strategy to ensure you always have a pipeline of new ideas and actively manage those ideas to bring them to fruition. Innovation should be a regular topic on the agenda for every management meeting.
While the generation of new ideas should be ongoing, it is difficult to be creative in the office, where there are so many distractions. The workplace can often be a hindrance to innovation, as employees are so focused on their everyday tasks and addressing the challenges that arise.