Published in “The Business Edge” website, November, 2011
There has never been a better time to cultivate an environment of innovation! We are in what has been referred to as the “new normal” business environment. Gone are the days of the last decade when we saw examples of 10 percent sales growth achieved solely by picking up the phone. Unemployment levels remain high and there are limited opportunities for growth. Who knew business executives could be so excited over one-percent growth? If that wasn’t enough, customers’ expectations are elevated (suddenly, they want more for less, too) and resources are scarce.
In today’s economy, it is not only important to think about how to incorporate innovation into your business, it is vital. Slow and steady progress and continuous improvement no longer will cut it. In the past, “good” worked; today, it might not even keep you in business. It takes more than “good” to stand out in the crowd and deliver consistent and increasing levels of profitability and customer service; instead, radical change and innovation are required. Focus on how to create and leverage innovation to not only improve your profitability but also to leapfrog your competition. You must change the playing field—and therefore the rules of the game— and throw out your old business models and practices. Instead, you need to think and practice innovation.
Recently, when reading “Inside Steve’s Brain” by Leander Kahney, about the late Steve Jobs and creative innovation, I thought I came up short in that department. Imagine my delight when I discovered that I actually have a talent in innovation as defined by Jobs, which, of course, I now fully agree with!:
“Creativity is just connecting things. When you ask creative people how they did something, they feel a little guilty because they didn’t really do it, they just saw something. It seemed obvious to them after a while. That’s because they were able to connect experiences they’ve had and synthesize new things.”
Thus, innovation is not some complex, non-understandable phenomenon. In addition to pure creativity, it’s about re-packaging—literally and figuratively—by connecting the dots in a new way and seeing trends and hidden profit opportunities. So, how do you go about creating a culture of innovation? There are three basic ways:
- Focus on the customer
- It’s all about the people
- Focus on the customer. Everyone says they focus on the customer’s needs, but do they? Are they doing what they think the customer wants (i.e., that happens to fit with their idea of which products have the best features, or with current branding, or with manufacturing capabilities) or are they accessing what the customer values?
So, how do you find out? Talk with customers. Ask for the laundry list of requests but do not stop there. Ask questions to help prioritize the list with the customer in mind. Which are relevant to how the customer competes in the marketplace? Make sure your entire organization is focused on the customer — asking questions and providing value but not just jumping to each, unprioritized non-value added request.
- It’s all about the people. It sounds strange for a discussion about innovation; however, the best people will create innovative ideas, products, and services. Consider asking your employees, your customers, your suppliers and other partners and trade associations. Undoubtedly, there will be a plethora of ideas.
Value the ideas, and give your employees room to try them out. The quickest way to kill a culture of innovation is to encourage ideas but not follow through and support them. It is much harder to implement than it sounds! In my experience, the first time an idea fails and causes month-end issues or customer problems, innovation is stifled. To counter this, we must reward mistakes as it is a critical component of cultivating a culture of innovation. However, we should address a trend that reflects the same mistakes since it appears learning hasn’t been incorporated.
- Flexibility: Do not become married to one idea, one product, one customer’s perception, etc. Instead, create solutions that build in flexibility — think of the nontraditional “and” of two, seemingly opposite ideas. For example, instead of thinking that reducing inventory will result in poor customer service—since you might not have as many products available to ship—think about how to reduce inventory and increase customer service simultaneously. Build flexibility into the process, but do not throw the baby out with the bathwater — it still must operate within the guidelines.