Innovation has become a global buzz word but it’s not a passing trend. Without mastering the ability to innovate, organisations are likely to stagnate or be overtaken by disruptors. It is critical to survival and success; innovation creates the opportunity to lead. In Public Services, innovation is equally important to support growth and improve efficiency in the city and the nation.
Innovation is the ability to make changes that improve customer service, business value and operational efficiency, leading to differentiation.
Innovation is challenging; our natural tendency is to continue to operate in the same proven ways. Change is risky for leaders and can be painful for people adapting to new ways of working and the uncertainty of change. Even harder is unlocking mindsets to be open to tackling problems and fostering new ideas and seeing them through to fruition.
So how do organisations innovate to succeed?
There are different types of innovation and it’s important to consider a blend of these models when framing your innovation agenda.
Incremental innovation is typically small to medium in scale and can be delivered at pace. A topical example of this is Robotic Process Automation – using bots to perform repetitive manual tasks can have a real impact on the workforce as we saw at Manchester Metropolitan University.
One of the risks of incremental innovation is maintaining a focus on the entire value chain. It is possible to optimise one step in the process, but that change could have an impact on the rest of the process. You must consider the entire value chain, including the external ecosystem and the overall customer experience.
A further risk with incremental innovation is creating technical debt and expanding complexity. Technical debt means that the innovation adds to the systems and structures in ways that make it harder to change in the future – optimising current processes at the expense of future agility. Agility is the most important capability to be able to respond to change. Expanding complexity also impacts resilience, more complex systems are less easy to operate reliably.
Transformational innovation is more structural, it requires more systemic changes to operating models, systems and practices. Transformational innovation is necessary when either the technical debt becomes a burden and a barrier to agility; or when external environmental changes mean the current business approach is no longer viable.
Transformational innovation requires rigour, a clear vision for the future, established primary drivers and continuous execution to implement change. Continuous transformation is a new way to address the transformation agenda – rather than seeking to replace systems we modernise and transform progressively. This is lower risk and more readily able to adapt to new demands as the transformation evolves.
Disruptive innovation is the most challenging; it means making radical changes to the business model. Making such fundamental changes typically involves implementing new business models that operate in parallel with existing models sometimes competitively, sometimes collaboratively. Disruptive innovation can create immense value but it is equally risky, new business models may or may not work in practice.
Change, progression, improvement… These are not new concepts and innovation might be the appropriate label in 2019, but the fact remains organisations need to adapt to survive. Each organisation is at a different stage in its innovation journey, but wherever you are it is essential that you are somewhere on that expedition.
Are you implementing one or a combination of the innovation models I have outlined? Keen to hear your views. Please leave a comment below.
Other parts of this series: