True innovation involves more than dressing up in trendy clothing: It’s a significant investment of both time and money.
January 25, 2019 6 min read
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Almost any startup looking to make waves in its industry will end up talking about innovation at one point or another. “Innovation” is that magic word that signals a company’s ability to thrive and not merely survive in the crowded world of startups. And, yes, it may be easy to talk about, but actually setting up a company for innovative success is a bit more complicated.
In short, fostering innovation boils down to recognizing that every resource allocated to innovation could, in the short term, be better allocated elsewhere. This is especially true for startups, where every penny — and every second — counts.
In her recent book, Imagine It Forward, Beth Comstock, a former executive at both NBC and General Electric, analyzed what it means for a company to encourage innovation in the right way. For many companies, innovation runs only skin deep, she wrote. Businesses create fancy titles likw “chief innovation officer” and throw money at a failed project or two to declare themselves “innovative.”
True innovation, however, involves more than dressing up in trendy clothing: It’s a significant investment of both time and money.
Why innovation is so hard.
Justifying the cost of innovation to employees worried about job security can be difficult because there’s no real way to predict a significant return on investment. Team members are also often quick to question the motives behind new initiatives that might change their job descriptions or jeopardize those jobs entirely.
Combine these issues with the associated financial cost and the result may be just a bunch of people paying lip service to innovation without putting in any real work toward it. What’s left is a nebulous idea that gets a company nowhere.
This all sounds daunting, but it needn’t be. Innovation requires a major commitment in both time and money — and success isn’t always guaranteed. But with the right people and systems in place, even the failures that innovation sometimes produces can ultimately be beneficial. The key is figuring out where innovation actually fits within a business, rather than just tacking it on as an afterthought.
How to encourage the right kind of innovation
A major obstacle entrepreneurs encounter when looking to innovate is figuring out what that word actually means for them. For one company, innovation may mean rolling out a virtual reality sales force. For another, it may mean using a shared Google Doc to track changes. Effective innovation can be vastly different, depending on the context.
That’s why it’s vital to lay a strong foundation that supports the development of new ideas and solutions inside a company. Here are four steps to take to get the right people and processes in place for your innovative success:
1. Decide whether innovation is actually even necessary.
Just because something’s trendy doesn’t mean it’s right for every entrepreneur. Innovation can certainly be good for business, but only if it’s actually helpful to the business model.
One of the biggest innovation punching bags in history was New Coke. No one asked Coca-Cola to change its recipe, even if it was losing taste tests to Pepsi. And what was important here was that Coca-Cola failed to take the right lesson from its research and instead spent millions of dollars on a new formula and marketing agency campaign, only to quickly have to return to the way things were.
In short: Innovation for innovation’s sake is just a way to throw good money after bad.
2. Actively champion innovation.
If innovation is indeed the right path forward, make sure your management is doing everything in its power to promote it from within. Innovation often starts strong and fades because it has no real continuous support. It takes time for new habits or concepts to be accepted, and usually that happens having in place the right people to help those new concepts and habits take root.
Vodafone, the British telecom, is an excellent example of a company going out of its way to create champions whose main purpose is to discover and define what innovation should mean for the company. Vodafone’s Innovation Program is a distributed network of 60 employees all over the company whose main task is to work directly with customers and find new solutions to a variety of issues.
3. Be tolerant of some degree of failure.
Failure is an inevitable part of innovation. The best solution usually comes only after a few bad attempts have been tossed out first.
Sometimes creating a culture where innovation truly lives means having a process in place for trying new things and then quickly abandoning them if their value isn’t realized. Nike, for instance, has embraced a successful “fail fast” attitude that encourages experimentation and prototyping rather than punishing every attempt that doesn’t work.
4. When in doubt, look for outside help.
Don’t be afraid to hire an innovation agency or digital transformation group to help workshop some ideas. While an outside company entails greater expense, outside thinking can help bring all of the stakeholders together and filter what’s being said without carrying any of the organization’s political baggage with it.
Companies such as Target and Domino’s use these types of agencies to prototype new products or designs before moving forward with them.
At the end of the day, successful innovation doesn’t come out of a buzzy press release and a handful of memos. It comes from a concerted and continuous effort and a foundation of transparency and trust in the process.
Everyone’s roles in innovation efforts should be clearly defined from day one, and feedback and collaboration should be encouraged throughout the entire process. Town halls and crowdsourcing are integral parts to the process and reinforce the belief that innovation isn’t about a single leader or life-changing idea — it’s a team effort.
By investing in the right people and creating a structure that encourages experimentation and proactive problem-solving, each and every startup can help innovation flourish in a way that actually makes sense for that particular company.