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Innovation to the Rescue

By Michael Rafferty

Michael Rafferty

It’s getting harder for companies to find ways to grow. Global competition and the rapid proliferation of technology are turning up the competitive heat in many markets, and companies are struggling to find an edge over rivals. In many of the more-developed economies we are witnessing a seemingly irreversible decline on manufacturing as operations migrate to geographies with an abundant availability of low-cost, skilled labour.

Difficult and challenging business conditions indeed.

InnovationThe hope for many companies is to innovate. Innovation—defined as something that adds significant value to one or more of a business’s stakeholders—represents the Holy Grail for so many companies, and the only route to creating a sustainable gap between themselves and their competitors. Senior leaders are asking: How can we be more innovative?, How do we tap into the resourcefulness and ideas of our people?, and Where is the next big idea going to come from?

In a joint report by DDI and The Conference Board—the Global Leadership Forecast 2014|2015—it was reported that driving innovation was one of the top four priorities keeping CEOs awake at night. To generate growth in mature and highly competitive markets, CEOs are looking to the ingenuity and creativity of their people as the fuel for future success.

Like many enterprise-wide challenges, the drive to be more innovative has found its way to the CHRO’s desk. This presents an opportunity to play a role in defining the innovation challenge and providing a credible view about how the organisation might tackle it. There is clearly a cultural and capability challenge in fostering innovation, and businesses would do well to focus on the following capabilities:

  1. Encourage curiosity
    If innovation is about finding new ways to deliver value, there must be someone to deliver value to. An idea is not innovative unless it has a customer. Understanding your customer’s world is the starting point for innovation. Leaders must encourage their people to get close to the customers. To spark innovation, it will be necessary to go beyond the surface-level needs of customers and find ways to uncover the deeper personal and practical needs that they may not be aware of. No one needed a computer mouse until it was there. Who would have guessed that Uber was missing from our transport options? Leaders must instill in their people a level of curiosity about the customer experience. Innovation demands more than getting close to customers; it takes a level of understanding and empathy that enables your people to “walk in the customer’s shoes.”
  2. Create insights
    There is a common myth that breakthrough ideas will appear in a sudden flash of inspiration. A related myth is that certain types of people (e.g. Steve Jobs, James Dyson, or Richard Branson) are more likely to experience these creative surges than others. Under this model, companies must find and hire special, creative people and then sit, preferably on beanbags, and wait for the innovative ideas to arrive. Sadly, big, new ideas don’t arrive like a bolt out of the blue. Nor do they appear as complete, fully formed ideas ready for implementation. The history of innovation is a story of creative insights, however, the part of the story that is glossed over is the years of hard study that went hand in hand with the insights. Einstein’s theory of relativity came after years studying other physicist’s ideas. Steve Jobs' idea for the IPod came from a long and drawn-out consideration of technology and social trends. The “a-ha!” moment that sparks innovation is like placing the final piece of the jigsaw, and not, as the innovation myths would have it, emptying the pieces on the floor and having them fall exactly into place.

    Insights occur when ideas collide with new or different perspectives or with other ideas. Leaders play a role in challenging assumptions and helping people adopt alternative or novel perspectives on business challenges and problems. Enhanced conversation skills will help people have insights rather than arguments, and leaders will often find themselves as facilitators in this process. Tools and approaches are available to support creativity and collaboration, but these are worthless if a leader is unable to create an environment where creativity is nurtured and celebrated.
  3. Support experimentation
    Business leaders crave certainty and predictability. Unfortunately, innovation thrives on risk taking and experimentation. In the world of design, the creative process is an iterative one. Rather than thinking to build, designers build to think (i.e. they use prototypes and models to inform their design). Leaders need to understand how to set the right tone to help people overcome the fear of consequences and the tendency to pursue perfection. This means equipping people with the license and techniques to take risks with big potential. The role of the leader is to provide air cover to allow their people to experiment without fear of consequences and ridicule.
  4. Drive execution
    An idea only becomes an innovation if a business can bring it to life. Once there is a commitment to a new idea, leaders must set the conditions to support flawless execution. This is more than implementation; the real challenge is often making the innovations commercially viable. Steve Jobs and Bill Gates were not only brilliant engineers, they were also strong business people, and their commercial savvy was the key to elevating their products and ideas above the rest of the market. Leaders must tap into the commercial realities of the business environment to provide the fuel for innovation.

Myth-busting innovation

Fostering innovation is a leadership challenge. Equipping leaders with the right capabilities to make innovation possible to grow value for customers is priority number one.

Can your leaders: Encourage curiosity, help others to think differently, and create insights? Provide an environment where people can try new ideas and drive implementation to turn ideas into reality? Nurturing curiosity and insights requires a different leadership approach than driving execution. A good leader of innovation will be adept at transitioning from one environment to another as required. They will also be adept at managing diversity and making the most of the different thinking styles and motivations of their team.

The companies that select, develop, and reward leaders with these skills are more likely to drive future growth through innovation.

Get more information about the Global Leadership Forecast 2014|2015 research, including how effective leaders rate themselves on key leadership skills such as innovation vs how HR rates their criticality and development focus.

Michael Rafferty is General Manager VIC for DDI Australia

Posted: 22 Sep, 2015,
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