We had the pleasure of chairing the Digital Innovation Hub in London this March. Innovation leads and brand marketers from across Europe met to explore how best to enable transformative innovation and to accelerate business change. Some key barriers to its successful delivery resonated and some impressive programmes were shared.
Five years ago, head of innovation had to be the coolest job title in business. In its nascent state, innovation meant being pioneering, owning the future view, exploring potential new processes, partners, products and services that would keep companies relevant in a fast-paced world of change.
Today, successful innovation leads are no longer in the business of prospecting. They’ve evolved into the Iron Men and Women of the commercial world – battling against the odds to deliver essential change. And in order to succeed, they have to bring those above them, (who are often instinctively risk-averse), along for the ride:
“Change has never been this fast. And it will never be this slow again,” Alex Topham, NatWest
Embracing innovation is increasingly understood to be critical, at least in principle, by business leaders. Yet many innovation heads still express the need for greater buy-in from stakeholders:
“The greatest risk is not to innovate. Standing still is no longer an option - failing to innovate is the biggest and worst response to change,” Nigel Bird, NatWest
In many cases, innovators are still positioned as lone brokers between ideas, business units and decision makers. They remain separated out from the core functions and do not own the growth agenda. They are still viewed as the business’s calculated risk-takers – not the business drivers.
Complex global organisations, (especially in finance and pharma), are challenged by red tape and regulations, entrenched internal processes and deeply-embedded traditional cultures. Even where a business has scaled at pace from a start-up culture, the appetite for a fresh round of radical change can challenge the key investors:
“We had to put our jobs right on the line to push through our innovation agenda,” Balal Ahmed, Investec
Speed and scale
For many, moving at pace is a day-to-day challenge. Innovators often have to sell concepts into business units and convince them to realign their budgets around a whole new business proposition, product or service that may not chime with their immediate commercial objectives. No small task.
Despite these challenges, the smartest companies are accelerating change and embedding innovation as a central requirement:
“Taking risks is part of our deep culture and DNA. We want to invent and create what is different. One person’s opinion can carry a programme forwards without consensus,” Niclas Nillsson, Leo Pharma.
Without scale, the most impactful innovations are doomed to fail. Bringing external influencers into the mix and relating innovation to the wider transformation roadmap can help stakeholders grasp the value:
“We don’t believe in frugal innovation… You have to build a smart airport like a small city.. Open it up to innovators and help the internal teams realise the future world they are already living in,” Sebastien Couturier, Groupe ADP (Paris Airports)
Solving a customer problem
A great idea or hunch is never enough. Innovation must be customer-centric if it is to succeed. Conducting deep consumer insight, testing a new product or service fast in the market and understanding where it does not, in fact, solve a customer problem, is fundamental to delivering an innovation that hits the mark:
“It starts and ends with the customer. What drives the behaviour is not necessarily what you think it is,” Beatrice Maestri, Electrolux
Where buy-in is a challenge, more lateral-thinking innovators are relying on their own prowess to get what they want. Showing, rather than telling budget holders what an innovation looks like, for example by dropping an automated drone vehicle into the office or making the actual users of a service present an innovation to the board, have proved effective methods for getting new investments agreed.
“If four people have an idea 12,000 will say they don’t like it – so we ask how to do something, not if we can do it. We need to use creativity to get things done,” Jeroen Bartelsen, Achmea
Outside-in influence is still embraced as key to feeding change. Open innovation is popular and sharing with competitors often the norm. Intrapreneurship enables collaboration with partners and employees and encourages greater involvement from internal teams.
‘We start with a problem internally, scout for the solution externally, then bring them together,” Andreas Jossen, SBB Swiss Railways)
Risk is one of the major blockers to successful change. The fear of failing is real. But innovation can’t take place without it. The challenge is to get stakeholders to take calculated risks that align to the business’s long-term vision as well as to the consumer’s immediate appetite for change.
“It’s ok to make a mistake but don’t do something stupid. Pathological risk takers are gamblers in a game where the odds favour the house not the player,” Nigel Bird, NatWest
Innovation heads may be big thinkers and increasingly influence stakeholder decisions, but they still rarely have a seat on the board. And until they do, many businesses are still not moving fast enough to ensure their future relevance against new market forces.
Working to a clear transformation framework and defined innovation process that aligns to the business roadmap will help them gain that essential commitment. Maybe their titles also need to be reviewed so their critical role is more clearly understood – from Heads of Innovation to Agents of Change?