How to bring the innovative ideas in your organization to life
Innovation is changing the way we work and live on a daily basis. Technology startups are redefining industry after industry, breaking rules and making new ones. Examples such as Uber (taxi), Spotify (music) Kreditech (banking) are just a few of the names that are having an impact.
In this world of constant disruption companies need to continually innovate or become obsolete. We regularly hear from many of our clients that they have smart people with lots of innovative ideas but are challenged with being able to translate these ideas into profitable offers.
The Napster story is a great example of innovation with unintended consequences. A music file sharing service developed by Shawn Fanning, disrupted the music industry, challenged how the world views intellectual capital, and made lawyers the big winners as this disruption played out in the courts. Subsequently Apple took this music sharing concept and created iTunes. While Napster created a music sharing process, it was not a business. Apple developed a business model, which engaged the music industry, rewarded recording artists and provided consumers with access to music at a price they were willing to pay. Apple harnessed its internal capabilities to build the business model, systems, and methods to create a profitable business.
This critical capability to harness innovation needs to be built into organizations. The ability to foster innovative ideas has no economic value without having people and systems to bring these innovations to the marketplace. To capture value, organizations must build the accountability for innovation into roles. Sustainable and scalable innovation for growth requires a variety of expertise and capabilities—different roles doing different work at different levels throughout the organization working to bring new innovations to market. The chart below illustrates where these values creation elements reside within organizations.
What became painfully apparent in the Napster story is that organizations require strategic leadership where executive and general managers generate new models and perspectives, and promote the continual questioning and organizational learning that will make innovation part of the culture. Operational managers build the processes required to operationalize the innovations. The management structure is the skeleton which connects business strategy execution, incentives design, and talent strategy to drive accountability for the longer-term Enterprise Value growth – which comes through innovation.
What is your Innovation score?
Is your organization designed to foster innovation? Rate your organization using the chart below:
If you would like more information on how to build innovation into your organization contact us.