5 Keys For Driving Growth Through Innovation

Many companies struggle with the concept of innovation–what it means to them and how exactly it contributes to the growth of their business. It stands to reason that the primary factor behind this uncertainty is that these organizations do not understand the key variables that affect organic growth via innovation.

Fortunately, enough experiential data is now available to draw viable conclusions about how to accelerate growth through innovation, as well as how to mitigate the risk associated with unstructured innovation. This data can be distilled into five key variables for successful innovation.

Key #1: A Climate for Innovation

One way to mitigate the challenges of innovation is by establishing a climate suited for innovation; in other words, an organizational culture that rewards calculated risk-taking, collaboration and trust. Such a climate enables employees to learn from their mistakes instead of being punished for them. It also supports quicker execution of ideas and a more agile organizational structure, all of which minimize exposure from innovation risk.

Key #2: A Balanced Innovation Portfolio

Innovation-elite firms understand that achieving uncommon industry growth rates means going beyond the traditional research and development focus. Companies that manage to grow through innovation typically develop a balanced innovation portfolio that spans many areas–products and services, processes, strategy, even the core business model. These companies also vary the required degree of innovation, from incremental to significant to breakthrough levels.

Organizations that deploy innovation in this way almost always generate higher return on investment than companies that limit innovation to new products. Also, companies that innovate simultaneously in multiple areas reap more rewards than those that innovate in a single area.

The Apple Corporation, for instance, has experienced tremendous success with the iPod, a product innovation. However, the success of the iPod is largely due to the introduction of iTunes, a business model innovation. Through this combination of product and business model innovation, Apple created $ 70 billion in shareholder value in just three years.

Key #3: Collaborative Teams

The third key to innovation success is to assemble innovation teams that are capable of flawless and speedy execution, and then manage these teams for high performance and collaboration. This is easier said than done. To begin with, the best teams will be composed of people with diverse problem-solving styles. That is, some will excel at seeing the “big picture” while others revel in the details, and still others operate best in between.

In addition to a well-managed balance of problem-solving styles, effective teams must have a cognitive level (i.e., knowledge) and motivation level appropriate to the innovation problem they are trying to solve. Companies that do well in this area typically adopt any number of organizational and interpersonal assessments, inventories and management approaches to determine the capabilities of their employees (e.g., Myers-Briggs, DiSC, Kirton Adaption-Innovation theory, etc.).

Key #4: A Systematic Process

The fourth critical variable is to make innovation repeatable, predictable and scalable. This means making it systematic using a consistent process, or methodology, that is applied by all teams. The process must also be robust enough to accommodate multiple innovation pathways because, while some growth projects require “thinking outside of the box,” others require more structure within existing paradigms. There are various methodologies available; the important thing is to choose one that is structured enough to produce results, yet approachable and flexible so that everyone in the organization can adopt it to the necessary degree.

Key #5: Proven Techniques and Tools

The tools most often associated with innovation are creative techniques, such as brainstorming. Yet, the most successful innovations strike at the heart of what customers want and need. Uncovering unmet customer expectations, especially latent ones, requires the application of any number of research techniques from surveys to ethnography.

Whatsmore, there exists a bevy of powerful idea generating tools, such as Random Entry, Provocation and Movement and others that go beyond simple brainstorming to generate outside truly unique and innovative solutions.

Once the ideas are generated, there are several techniques that enable the objective analysis of competing ideas so the best one is chosen. Designing and piloting the subsequent solutions requires yet a different set of tools, many familiar to those in the process improvement arena.

The point being, organizations that succeed at innovation understand that innovation is a process, and they provide the tools needed to navigate the process from end-to-end: from defining the problem, to discovering the solution, to designing and demonstrating the result.