Over the past decade, innovation has become viewed as fundamentally important to business success. In a world facing continual disruption, innovation is seen as the best way businesses can retain customers, engage employees and grow. This is all absolutely correct: Our fast-changing times mean that there are no longer any certainties in businesses. In an era when the average lifespan of an S&P 500 company is just 20 years, enterprises understand they must embrace organisational innovation to keep ahead of the game. So, why is it that so many businesses are getting innovation wrong?
The innovation error
For most companies, innovation is not yet front and centre of their business. Rather, innovation capabilities are bolted on to the side of the business without being integrated with core activities. Organisations invest huge sums in innovation ‘labs’ and ‘studios’: boutique hubs with their own culture, processes and operational structure. And while often the culture and ways of working in these boutiques are correct, businesses watch on as each proposed innovation fails to meet their business objectives or deliver services with clear and relevant value. It’s easy to see why innovation practices are sometimes viewed by business leaders as a little more than a ‘fluffy’ nice-to-have.
If organisational innovation is to live up to its promise, then firms must find a way to align it with their core business objectives. This is nothing short of an existential issue for business: innovation is essential to surviving disruption; but only if it has purpose. A tick-box approach will lead quickly to failure.
Link innovation with the core business
The good news is that existing investments in agile delivery and rapid innovation processes need not go to waste. For innovation to succeed, businesses need only to apply culture, processes and capabilities to their core business requirements. This means that all innovation projects must take the business’ goals as their starting point.
No two organisations will be the same, and every business will need to align innovation against the right balance of core, adjacent, and new business opportunities. Flexibility and a willingness to change is everything in this respect: an innovation strategy must be fit for purpose and central to your organisations strategic aims in a world where change is continual. Significantly, if you identify the need for significant business transformation you must follow through: innovation often fails because it is too small-scale; sometimes iterative change simply isn’t good enough.
Partnerships are key
To achieve an innovation architecture capable of delivering strategic change at scale, businesses will need to make the right partnerships. This is for the simple reason that modern innovation architectures are so complex no single organisation can bring all the requisite capabilities together without help. In this respect, it’s encouraging that organisations are increasingly scanning the venture capital ecosystem to source capacities that they can add to their own innovation practices. However, it is important that businesses look beyond their own industries, so they can gain insight into the broader innovation ecosystem. With customer expectations more fluid than ever, businesses need a broad partnership ecosystem so they can adapt to fast changing consumer behaviours and demands.
Innovation isn’t an option
The world is in a state of perpetual flux; and every day businesses must navigate highly turbulent political, environmental and societal challenges. Innovation is the vital hope for businesses to weather this turbulence and find solutions to some of the world’s most important challenges. But it will only work if it is true innovation rooted in core business objectives. Achieving this involves reshaping innovation in the organisational culture of businesses to ensure it delivers. In my next blog, I’ll provide some further ideas for how businesses can do just that by leveraging innovation as a service.
Accenture’s newly-formed Innovation Team has been created to help enterprises achieve breakthrough results with strategic innovation. For more information, please contact firstname.lastname@example.org.