Many organizations are resistant to changes and continue operating the way they had been operating in the past. To remain competitive, they work harder, improve efficiency, reduce cost and implement best practices. But, this is not enough. Instead of getting stuck in their standard mode of operations, organizations need to adopt innovative ways to change the strategies. The best way to create a competitive edge and be in the head of the competition is to innovate by drawing advantage from the creative power of your people. Turn your greatest assets into opportunistic entrepreneurs who discover new ways and improve the way they do business. Management innovation involves total transformation of existing culture to enhance organizational performance in an integrated manner involving technological innovation, product and service innovation, and strategy and structural innovation.
Every organization needs to have a vision, a culture and a process of innovation to build a truly innovative environment. There are eight key elements that create a truly innovative organization as below:
- Painting the vision. The first step is to paint a desirable, challenging and believable vision. Innovative leaders must be sure that people share a common goal and embarke on a journey all together. Being all together means they accept easier the changes, all the challenges and difficulties that show up during the journey. Innovative leaders should delegate more responsibility, and empower the staff with control over their work. Once staff is aware of the goal and direction headed, they contribute the best creative ways to solve challenges and obstacles that lie ahead.
- Build an open and questioning culture. The painted picture quickly fades away from view, so great leaders should take time to meet staff and illustrate the goals to be achieved and the challenges to overcome. Leaders inspire the staff to become entrepreneurs finding innovative routes to success and constantly remind them how their role is decisive in fulfilling the vision and meeting the challenges.
- Empowering. The purpose of empowering your people is to turn them into entrepreneurs looking for new opportunities. By empowering, leaders enable them to develop the skills for the task and achieve the change through their own efforts to come up with radical innovations. People need freedom to succeed and need to understand and agree on what management expects of them. People and management must agree on the scope of freedom and responsibility. Empowering means trusting your people, supporting and believing that they will achieve great things.
- Set goals, deadlines and measurements for innovation. Change is uncomfortable, resulting in anxiously people fearing an embarrassing or costly failure. Leaders should spend time with people encouraging them to undertake risks and come out from their safety zones. Leaders should reassure them that risks are necessary and worth taking and no one will be punished if their initiatives do not succeed.
- Use creativity techniques to generate a large number of ideas. Innovative leaders should build a culture where everyone can come up with creative solutions and crazy ideas through techniques, methods, and workshops. The goal is to change the people within the organization; from people who do routine jobs into highly energized entrepreneurs who constantly search for new and better ways of making the vision a reality. People need to be trained to learn the skills and to develop the confidence to try new methods, and use creative techniques to come up with new solutions.
- Review, filter and select ideas. In the innovation process many ideas are generated in response to a given issue or challenge. At the end, the most promising idea is selected.
- Prototype the promising proposals. After the idea is selected, then the move is to rapidly prototype it.
- Analyze the results and the successful projects. New product is tested for its feasibility, attractiveness and payback. Those that pass these criteria are given more funding.
The most effective, efficient and leading edge organizations are those that innovate and encourage innovation. Innovative organizations require a strong leadership team to approve the importance of innovation and create a culture for it. A development of strong capabilities for innovation leadership need to be started early in the career development process. In an innovative culture, the staff is given freedom to innovate and experiment. In an innovative culture, risks are managed and the organization understands and accepts that future success is built on a series of learning from unsuccessful attempts. Collaboration with outside parties to generate and adopt innovations is encouraged. Success will depend on strong leadership. We can take learning from market leaders to help us identify key leadership behaviors to promote innovation as explained below:
- Lead continuous innovation and improvement. Develop and communicate an encouraging story.
- Encourage partnerships and collaboration. Staff should be exposed to new viewpoints and ideas that can be adapted in the organization. To do this, the organization should create partnerships and collaboration with different parts within or outside the organization.
- Promote innovation. Organization should consider innovation as a core part of its role, and time is allocated for its employees to innovate. Different organizations have created bespoke labs or prototyping space that staff can use to develop and undertake early testing of ideas.
- Recognize and promote the success of adopters and diffusers of innovation. Commissioners and providers are encouraged to reflect various forms of innovation in their commissioning schemes – which may include goals on putting new inventions into practice, adopting changes already proven elsewhere, or spreading proven changes within an organization or to other providers.
- Reward innovative thinking. Innovation must be viewed as part of a deliberate process. Management should recognize that innovation can happen at all levels in an organization and staff who seek new and better ways of doing things should be rewarded.
- Use and share knowledge. Many organizations support staff to join knowledge communities to share the ideas and initiatives among innovators and potential adopters. Staff who have access to diverse and timely information are stimulated to generate new ideas and use best available evidence to inform decisions by creating effective networks for sharing ideas, knowledge and experience.
- Manage risk and tolerate failure. Organizations supporting an innovative culture recognize that not all ideas will work through testing and evaluation. Innovative organizations assess and manage risk actively, making sure to fully understand the risks that are present in their current system. Failure is viewed as part of the learning process rather than something to punish.
- Promote learning and development. Organizations provide their staff with the necessary specific tools and techniques of improvement to support radical rethinking of services. They create and develop the capability to innovate and build.
Examples of Innovative Organizations
The search leader, Google, has earned a reputation as one of the most innovative companies in the world of technology. A few ways how Google hatches new ideas:
- Open Office Hours: Managers discuss new ideas two/three times a week. Google’s personalized home page is one success born from this approach.
- Free Thinking Time: Google gives all engineers one day a week to develop their own pet projects, no matter how far from the company’s central mission. Google News is an example of this process.
- Big Brainstorms: As it has grown, Google has cut brainstorming sessions. A concept is discussed for 10 minutes. The aim is to build the initial idea with at least one complementary idea per minute.
- The Ideas List: Anyone at Google can post thoughts for new technologies or businesses on an ideas mailing list.
- Acquire Good Ideas: Although Google prefers to develop technology in-house, it has also been willing to snap up small companies with interesting initiatives.
3M, is a company whose name is synonymous with innovation. 3M has three approaches to a new product development: projects which are spearheaded by employees and are not overseen by management; traditional development, in which business managers and researchers work together to create new products or improve existing ones; and pacing programs, which consist of a small number of products and technologies the company thinks will produce substantial profits fast and are thus given extra attention and resources. The process works, 3M has achieved its goal of getting 30 percent of sales from products less than four years also consistently that is considering raising the bar. 3M culture supports innovation and risk taking to come up with new ideas and new products. At 3M, innovation is a primary goal supported by top management and spread throughout the organization. Managers also recognize the importance of staying in touch with customers. Strong cross-functional coordination and communication helps identify customer needs, turn new ideas into new products, and get them to the marketplace fast.
What is innovative about Starbucks ? It is innovative because it gets you to think about more than just coffee. Starbucks has made coffee a side item to its main offering; the store is a destination. It has translated the purchase of coffee into a place to go to read, relax, hang out, a destination unto itself where items like Starbucks only music CD specials can be marketed and sold. You may think you go to Starbucks just to get coffee but you really go because the brand of Starbucks is in your brain.
British Petroleum is doing the same thing as Starbucks to its gas stations. They are trying to transform the gas station more than a place to get gas. They are opening Wild Bean Cafe where you can pick up snacks. They are trying to make it a destination.
There have been many technological inventions in order to make air flights more efficient. Southwest Airlines presents the business model which focuses on how to efficiently use the capital assets and reduce the total costs. With this cost advantage, Southwest airlines could expand the air travel market. It operated one type of aircraft on a system and had no assigned seats. The flight attendants together with the flight crew helped to clean up the cabin after every flight. Virgin Atlantic distinguishes itself by offering a differentiated and attractive experience. Virgin offers a fun and lively experience by providing complimentary massages and manicures services on the board, a bar in the sky and a wide range of entertainment pleasantries. Furthermore, Virgin extends the quality throughout the total travel time to include transit to the airport as well as in their airport lounges. In particular, Virgin’s lounge at Heathrow airport is so popular that passengers show up hours before departure just to spend some time there. Singapore Airlines emphasizes the highest quality service at every interaction with the customer. Flying with them is like being in a five-star hotel in the sky. These companies do not compete with each other but they provide to their customers the last best experience they have ever had and they are good at exceeding it.
The Gillette Company gained an enormous market share over the years due to the production of a new and better shaving systems like the Sensor and Mach III razors. The firm recently poured its important resources into an ambitious project, the motorized M3 Power razor. Along the way, Gillette has developed a culture of continuous innovation to stay a step ahead of its competitors.