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The Necessity of Innovation

By Hunter Street Email By Hunter Street
June 2015
The Necessity of Innovation

 

The global business environment necessitates that every organization, big or small, adapt and innovate on a constant basis. Innovation within an organization must not be thought of as a one-time, or even occasional, event. It must be an on-going process, one in which there is open encouragement at all levels within the organization.

Broadly defined, innovation is something new or different introduced into an existing company or system. Organizational innovation may be thought of as developing solutions that meet new and existing market needs or that result in a better delivery method within the organization. Innovation begins with the development of ideas and ends with successful implementation of those ideas into the organization’s systems. The latter is where most innovative ideas meet their demise. Most managers and front-line employees have no problem identifying emerging trends in the marketplace. But most do have a problem with successfully communicating those trends to upper management and obtaining the organizational buy-in necessary to effectuate change. Organizations must follow steps to create an environment of innovation.

First, organizations must develop methods and processes that allow them to recognize where innovation is needed. Most successful ideas have a life cycle; companies must stay ahead of the cycle so that they are leading rather than trailing the field. There are many approaches to finding the next “big thing.” Last year The Home Depot, Inc. opened a university-based research and development center at Georgia Tech which is designed to foster creativity and innovation. The center has the added benefit of creating a recruitment pipeline for the company. Gail Goodman, CEO of Constant Contact shared in Forbes magazine that they have created two-day “Innovation Jams” for all employees, which gives them time to innovate on any idea for any part of the business.

Customers are another great source of innovative ideas. A customer-oriented approach is a great way to uncover opportunities. Wolters Kluwer encourages its management and sales teams to spend time following in their customer’s footsteps to identify the pain points and develop new products. Home Depot also requires its corporate teams to spend at least a week a year walking the stores. Companies must also look outside their traditional management ranks when seeking innovation. Most managers are risk averse and trained to be cautious; they need to find and cultivate creative teams that think like designers rather than executives when searching for new ideas.

For any innovation program to succeed, management must make innovation a priority and provide executive cover for those that take risks to effect change. Gray Advertising gives an award each year for the riskiest idea that fails. Company leaders must establish the importance of ideas and innovation, giving employees the freedom to spend time on ideas.

Second, once the innovation has been identified and developed, companies must have a strategy to adapt and implement adjustments for the organization’s particular needs. The strategy must take into account the existing technological infrastructure and the various parties within the organization that will need to participate. A new idea may require a company to educate and train current employees or hire new employees who have the necessary skills.

Finally, companies must measure the success of programs that foster innovation. To do that, companies must have a clear idea of what constitutes success for them and understand that success can mean completely different things depending on the enterprise. Goals can range from specific revenue markers to signing up a certain number of new customers to the creation of a new market for the company’s products. Some results may not be measurable by objective standards, like a better customer experience or innovations that create more productive employees. The key is that the result must be important to the company.

To create a company culture that values innovation takes time, resources, and constant support from the top.


[Business Insights is hosted by the Law Firm of Kumar, Prabhu, Patel & Banerjee, LLC (KPPB).  Hunter Street is an attorney of counsel at KPPB, primarily working on commercial real estate and business law transactions.

Disclaimer: This article is for general information purposes only, and does not constitute legal, tax, or other professional advice.]



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