Innovation distinguishes between a leader and a follower. New business is created by new ideas, by the process of creating competitive advantage in what an organisation can offer.
Society depends on innovation. It is strongly associated with growth, and it goes deep in the heart of our history books, pointing out how far and for how long it has shaped our lives. That’s why great inventors are famous and well regarded, and, in the process, few of them get rich.
Entrepreneurship, by contrast, is applying the innovation to bring the ideas to life. Entrepreneurs build businesses and propel the innovation forward. They grasp the opportunity to cash in on the innovation and transform big ideas into impactful solutions. Humanity’s progress relies on entrepreneurship – and, thus, great entrepreneurs get even richer than great innovators.
In the words of the founder of modern business management, Professor Peter F. Drucker:
“Innovation is the specific tool of entrepreneurs, the means by which they exploit change as an opportunity for a different business or service. It is capable of being presented as a discipline, capable of being learned, capable of being practised.”
However, there is no proven formula for success, particularly when it comes to innovation. Since innovation is a complex, company-wide endeavour, it requires a set of cross-cutting practices and processes to structure, organise and encourage it. Taken together, these essentials – shown in the diagram above – constitute an actual operating system under which innovation is more likely to thrive.
Fresh, creative insights are invaluable. However, in Ainira Industries’ decade-long experience, many companies run into difficulty less from a scarcity of new ideas than from the struggle to determine which ideas to support and scale. Innovation is inherently risky, and getting the most from a portfolio of innovation initiatives is more about managing risk than eliminating it.
For companies to sit still and not successfully innovate is mostly to wither away, since new competitors have often leapfrogged industry incumbents. Complacency is not an option. In this increasingly educated, talented and mobile world, with lower labour and production costs abroad, and information at anyone’s fingertips, successful startups can pop up anywhere.
Some high performers in product, process and business model that have re-engineered their supply chains, boosted product quality and rolled out lean six-sigma, do not easily reinvent themselves as leading innovators. They are better executors than innovators, and most succeed less through game-changing creativity than by optimising their existing businesses.
These companies, most likely, still struggle to meet their growth goals and seldom thrill their customers. No matter how committed, a CEO cannot single-handedly reconstitute a company for innovation. The entire top team must be on board, and the re-engineering efforts of retooling the management practices for innovation have to be managed by either an internal or outsourced strong, dynamic, knowledgeable leader.
Ainira’s founding team of serial entrepreneurs has a proven track record of multi-sector innovation that helped secure a number of exits to Fortune 100 and Global 500 companies. Besides ongoing business model and technology innovation and entrepreneurship, the Company is building on our years of client-service experience to provide consulting to a broad range of multi-industry organisations.
We are helping them build a far-reaching corporate vision and coalesce an action plan, which combine high-level aspirations with estimates of the value that innovation should generate to meet financial-growth objectives. Quantifying an innovation target for growth and making it an explicit part of future strategic plans solidify the importance for innovation, justify the time and money investment, and add accountability.
Over the past sixteen years, we have led dozens of innovation projects and have talked to hundreds of managers about the challenge of building in-house high performance innovation. Skills, tools, metrics, processes, platforms, incentives, roles, and values all have to come together in one fine-tuned, supercharged, race-winning innovation machine.
If your organisation is really serious about building such an innovation engine, then it needs to find a way to upgrade everyone’s innovation skills, agree on what counts as innovation, establish comprehensive metrics, hold leaders and consultants accountable for innovation, and retool its management processes so they foster innovation everywhere, all the time.
These cannot be isolated initiatives – they must work in harmony while being coordinated by experienced professionals. Do all this and you will have a company that can win, and win again, in the twenty-first century’s creative economy.