Innovation doesn’t just happen - how companies have to prepare for change

At Galway Business School, you can take up a Certificate in Innovation and New Enterprise Development programme, but what are the challenges for innovation in the wilds of business?

Leaked advice from a consultancy company recently revealed how Netflix were hoping to change their descriptor from ‘disruptor’ to ‘innovator’. Mostly to avoid regulatory scrutiny, but also because ‘innovation’ sounds more constructive than disruption. Or at least more constructive than destructive. And with fewer casualties.

While randomly swapping words is a distraction exercise with little merit to it, there’s no doubt that Netflix is an innovative company that has, in fact, disrupted its market beyond recognition. But learning from exceptions is tricky - by their nature, companies which are outside the boundaries of ‘normal’ are operating in different contexts to the rest of us. 

For mere mortals, innovation in management is more than swapping labels around and hoping for some high fluting ideas, it’s about the structures and processes in your organisation and ensuring they  allow innovation to flourish at all levels.

A company’s ability to change and unleash new ideas from employees at all levels (as well as customers, partners and suppliers) and to drive new value and revenues is a core skill in a fast-moving world where globalisation and technology are creating new possibilities on a daily basis.

Innovation is therefore, for many, a key driver of growth. Companies can still look to make incremental improvements in their ‘traditional’ products and services and the processes which provide them - but they also need to pioneer real innovations in their business processes, distribution, value chains, business models and the functions of management.

But it’s not so simple as calling everyone together and telling them to ‘have some new ideas’ and waiting for them to roll in. That does happen - there’s always the ever-present danger of senior management reading a book over the weekend and hoping that by talking about a process then that process will happen.

Sadly, innovation isn’t about incantations in that way - creating and sustaining an innovative and creative atmosphere in the company doesn’t just happen by hoping for it.

To build the sort of company that has the right conditions, you need to look at your people, your structure and your corporate culture.

Leading the change

The first people who need to get with the programme are the senior leadership. Too few in top management make serious attempts at explicitly driving innovation. It is often (literally) not on the agenda - too rarely discussed and far from front of mind in the strategic planning processes. There can be a feeling that the day job is complicated enough, thank you.

That approach from the top sends strong signals to everyone else in the organisation - a sign that they needn’t bother. Innovation means change and the effort in delivering that can take away from the ‘day job’ and any incentives associated with that.

In other words, it can cost people money in the short term which is clearly a disincentive. For change to be embedded in the culture takes real effort to win over hearts and minds and leadership teams need to drive the right behaviour - the lateral thinking, risk-taking, diversity of approach that can make a big difference in the long run.

Part of that is to define the right kind of innovation - to not make the sort of wide-eyed jumps that ended with the Segway or Google Glass. Managers need to explain what sort of progress they are expecting - in product, supply chain, marketing or elsewhere. If you don’t tell people what you want, don’t be surprised if you don’t get it.

Cultural shift 

In that way, you can begin to move the topic of innovation from the leadership to the rest of the employees and make it part of the culture. Creating innovation networks allows you to corral the people together who are enthusiastic about change and pull them together from across the business to create a diversity of thought around the topic.

You can bring together people who have ideas, people who understand the current workflows and the data behind then, people who are experts in a specific part of the chain and those with the licence to authorise change and experimentation. Enrolling people together in that way is an inexact science but it can also democratise the process and get buy-in throughout the company, and create a culture of trust where the ‘there is no such thing as a stupid idea’ mantra is genuine.

Structural defaults

With people and culture, comes structure. That might take longer and can be disruptive (as well as innovative) to the business itself but there’s notable differences between a traditional and an innovative organisation. A traditional organisation might be bureaucratic, with strict division of roles, and a hierarchical organisation where steps up that hierarchy are financially rewarded.

Innovative companies might have flatter set-ups with teams set up around tasks rather than roles, with rewards centred around autonomy and licence to operate.

The ‘old ways’ might centre on finding easily repeatable work practices and eliminating variation, with recruitment based on finding like-for-like. New ways might be a looser approach that encourages variation and recruitment processes which bring diversity of thought.

Bringing together process, culture, people and structure is a Big Thing. Successful innovation doesn’t happen because ideas fall out of trees. It’s a learning process. The successful managers and entrepreneurs are the ones who take the time to learn how to create the company which will nurture the ideas that can change everything.

At Galway Business School you can learn to deliver innovation through a Certificate in Innovation and New Enterprise Development programme. Or browse all of the our business courses we have available.