If established companies are to be truly innovative, they must be able to balance the twin engines of execution and innovation and create a culture where everyone focuses on these two imperatives simultaneously. It involves breaking down silos and creating psychological security for employees to suggest and develop new ideas.
These are among the observations of INSEAD management professor Ben Bensaou in his new book Built to Innovate. Bensaou, whose work focuses on how to develop innovation capacities in organizations, asserts that there is a latent capacity for innovation in all companies that managers must unlock and that the often criticized layer of middle managers in particular should be rewarded for doing so.
“People are generally interested in innovating. The problem is that they often don’t think their ideas are welcome or, even worse, they are afraid to put them forward. Organizations need to give their employees permission to innovate and make sure they are motivated to do so, ”he told the Irish Times.
In execution mode, he explains, bosses can tell whether their employees are performing against established key metrics. When people operate in the innovation space, that certainty no longer exists, so playing it safe is often an attractive option. A useful tactic to combat what he learned from one of his graduates, who deployed it at his workplace in Japan, is simply saying “thank you” to anyone who comes up with innovative ideas.
In a book that combines business model concepts with detailed case studies, Bensaou presents interesting examples of how large organizations encourage more innovative practices and the tangible results that flow from them.
In multinational company WL Gore, best known for developing a range of breathable fabrics, early stage ideas have the opportunity to germinate freely without being subjected to economic or other viability tests. The most promising ideas are then driven through an innovation funnel.
Three key questions are discussed under the headings of real, gain and value. Does this represent a real business opportunity? If we follow his in the market, do we have the potential to win in this space? Are the potential financial rewards worth the investment of the business’s time, money, and other resources?
A newcomer to Gore who couldn’t figure out what to do kept asking her coworkers “Who is my boss?” Before someone finally tells him to stop using the “b” word. She finally understood that she had to define her own work and join a team of colleagues engaged in projects that she found compelling. In the end, she became a very successful member of the team.
“It took a long time to understand and accept that she was supposed to innovate and execute. This is understandable, as the required dual mindset is not generally understood or encouraged in most companies, which helps explain why so many companies struggle to innovate, ”he says.
Aligning customer needs with business goals is key. Bensaou offers a value testing framework. This poses three questions. Will this idea increase the willingness of customers to pay for a product or service? Will it reduce the cost of producing the goods or providing the service? And, finally, is it a good idea that deserves to be deepened?
“Just asking these questions consistently every time an innovative idea is presented will impact the way your team members think. Soon, they will almost automatically ask themselves the same questions, training themselves to be more skilled assessors of the potential of an innovative idea.
So-called “dabbling time” has been notoriously institutionalized in innovative companies like Google, where employees have time to work on their own projects. Bensaou says the guiding principles here are freedom, fairness, commitment and the waterline, the latter referring to the principle that no innovation plan should jeopardize the entire company.
Employees should feel they have permission to experiment, but two other ingredients are essential, he notes. They must have training and tools to know how to innovate in a targeted way and they must also feel a high level of motivation given the challenges associated with developing new ideas.
Structure is important, but serendipity also has a role.
Consider the history of Boost, a revolutionary foam used in the soles of high performance running shoes. The key element of the foam, thermoplastic polyurethane (TPU for short), has long been used by the German conglomerate BASF in various applications. One day, a scientist named Frank Prissok, working in one of the company’s labs, noticed that by applying pressure and heat, the material could be expanded into a foam filled with tiny pockets of ‘air.
It was an interesting find with no obvious application, but he sought advice from his colleagues and released videos. A colleague who worked on regular shoe soles saw a potential application and contacted executives he knew at Adidas.
A co-creation process began between the two companies to exploit the idea, leading to the launch of the Boost running shoe brand in 2013. It created an immediate sensation in the competitive running world.
In one year, a new marathon world record of 2:02:57 was set by Kenyan Dennis Kimetto using a pair of Adidas shoes fitted with Boost soles.
Boost is also an example of innovative collaboration that takes place beyond company boundaries, an increasingly common practice where cross-functional teams visit customers to better understand their needs.
But sometimes innovative information can be captured just by listening to people within the organization, especially those who work in customer service roles. The process should be encouraged and ideally formalized.
Take Starwood Hotels (now part of the Marriott group). He created a cadre of so-called ambassadors to provide a channel for turning customer needs and preferences into innovative thinking. Through repeated contact, Ambassadors have come to know a variety of clients intimately, from globetrotting business travelers, families with young children to young backpackers on a budget. At bimonthly meetings, ambassadors shared their observations and suggested innovative ideas, many of which have been implemented.
A culture where innovation is encouraged is bearing fruit. Domino’s Pizza provides another good example. When Covid-19 required contactless home deliveries, a frontline innovator, knowing that customers don’t like finding their pizza on the floor, made a cardboard pizza pedestal to keep the box with the hot pizza on. ground. Within weeks, pizza pedestals were in widespread use across the chain.
THE BENSAOU THREE-STEP INNOVATION PROCEDURE
Creation – the process of continuous generation of new ideas thanks to an innovation engine. This includes new or improved products or services; ideas for identifying and serving new customers or markets; or ideas to make processes more efficient, faster or more secure. When an organization builds an innovation engine, the creation process takes place in every department of the company.
The integration – the process where dispersed innovation capacities come together – a connection of dots. It connects people across the organization into a social network that can also extend beyond organizational boundaries to include customers, suppliers, academic partners, and start-ups.
Crop – To prepare for the future, each organization must question its existing strategies and preconceived ideas, even during their implementation. Organizations need to take a break and compare innovative ideas to current standards, as this opens up new and potentially better options.
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