Innovation is important, innovation is what your company needs and you can make innovation happen at your company! You just need to bring together the right ingredients to be a winner: clear strategic objectives, management support, strong incentives, structured innovation management processes and sufficient resources allocated.
Great! So how come it does not work at your company? This question always leads to the same type of answers:
- No real high level management support;
- Incentives are not stimulating to generate the results searched for;
- Problems with resource allocation to innovation activities;
- Difficulty in measurement of results and therefore hard to gain enthusiasm throughout the organization for innovation;
- Little interest from employees to spend time on innovation.
Not very often do we hear about clear solutions for these issues, although they are the most important questions to be handled. It is much easier to start an innovative company from scratch than to bring the innovative spirit into a long existing, not so innovative company. You do not change company culture, processes and management overnight.
I will not be able to treat the solution of all of the obstacles mentioned above in this post, since there is too little space, but I will touch upon a few important steps.
First of all, you will need to find yourself a convincing case for innovation. What is the main reason to innovate? Is it the competition that is outperforming you or gaining market share, is it potential newcomers that come in with new technologies, products or business models that threaten your existence? Changing consumer preferences? New market opportunities? A convincing case for innovation will make it easier to gain high executive commitment. If your company is doing extremely well, you will find it harder to convince higher management. Your case will need to show eminent danger or marvelous opportunities, for them to put their money where their mouth is. Everyone likes innovation, but when it comes to allocating resources they might be less interested. In the end it is all about where the bonus is coming from.
And that is exactly the second point: you will need to make sure the high executive’s bonuses are linked to innovation results as well, such as revenue generated by innovation, growth in new markets etc. And since real innovation takes time, bonuses cannot be linked to quarterly performance, but need to be earned over time.
The third point is allocating innovation resources exclusively to innovation activities. Although all employees might be requested to give great ideas, not all of them will have time and skills to implement them. You will need dedicated employees with specific careers to bring ideas to commercialization. And if no funds are available for innovation in any given moment, easily projects will be put off to the next year, when they can be incorporated in the yearly budget. So make sure money and people are really 100% dedicated to innovation.
Making these three things happen will bring you a big step further to create a more innovative culture and structure. Of course they alone will not guarantee your success, but they will send a clear message to the organization: we, as higher management know innovation is necessary, we’ll allocate resources to it and will make sure our income depends on it!
Caspar van Rijnbach is a Brazilian based innovation consultant, author of several international publications and currently responsible for the innovation practice of Ernst & Young Brazil.